Dogecoin Set for Key Retest at $0.40; Is a New Peak Likely?

The Dogecoin token is on the verge of sustained bullish sentiment as its price action hovers around the key resistance level at $0.40. According to TradingView’s data, this price zone has historically been a turning point for the cryptocurrency, serving as either a launchpad for breakouts or a barrier prompting retracements.

As a result, traders are now closely monitoring whether the cryptocurrency will smash through this resistance or face a temporary setback. Supposedly, if the token breaks above the $0.40 mark, it could set its sights on revisiting 2024’s peak at $0.48 and surpassing it. However, failure to clear this critical level may result in a pullback, forcing the token to regroup before making another attempt.

At press time, DOGE was trading at approximately $0.3888, reflecting a 1.80% gain over the past 24 hours. With a market cap of $57.35 billion and a daily trading volume of $2.97 billion, the cryptocurrency boasts a volume-to-market cap ratio of 5.16%, underscoring robust investor activity around this key juncture.

Dogecoin’s Technical Indicators Point to a Possible Breakout

DOGE’s recent price action reveals an encouraging breakout from an asymmetrical triangle pattern, a classic indicator of a bullish reversal. Following a 28% surge from the pattern’s lower boundary, the token reached a high of $0.39 before entering a consolidation phase. This sideways movement could signify a buildup of momentum, priming DOGE for a decisive move.

The alignment of moving averages also supports a bullish narrative. The short-term 50-day MA at $0.3815 and 20-day MA at $0.3357 are comfortably positioned above the longer-term 100-day MA at $0.2777 and 200-day MA at $0.1945. This configuration reflects a textbook bullish trend, suggesting the possibility of continued upward movement.

On-chain data adds another layer of optimism. A net inflow of $20.63 million into Dogecoin signals growing investor interest and possible accumulation. Historically, such inflows have often preceded significant price rallies, providing the liquidity needed to increase prices.

Momentum Builds as Key Levels Come into Play

Not to be outdone, the Relative Strength Index currently stands at 59.55, safely above the neutral 50 level and just shy of the overbought zone. This indicates there is still room for upward movement before the market overheats. A rise in the RSI could further support a breakout, with $0.40 emerging as the next key hurdle to clear.

If successful, DOGE may embark on a rally to reclaim and surpass its 2024 high of $0.4846. However, the path forward is not without risks. If the cryptocurrency fails to breach the $0.40 resistance, it could retest support at the 50-day MA around $0.3815 or drop further to the 20-day MA near $0.3357.

A breakdown below these levels could see DOGE spiraling toward the critical $0.30 mark, which, if breached, would invalidate the bullish outlook and prompt a deeper retracement to the 100-day or 200-day MAs.

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