This time, nobody’s tweets have put Dogecoin back on traders’ radar, but rather its technical setup suggests a potentially explosive move. The meme token is trading at about $0.219 after weeks of consolidation, right at the intersection of crucial moving averages and support levels that could dictate its next significant move.
According to the chart, DOGE has been maintaining its position above the rising trendline that began to gain traction in July. Every dip toward $0.21 has been greeted by buying pressure, despite multiple attempts to break lower. Because of this tenacity, bulls have remained optimistic that a breakout may be imminent.
The convergence of moving averages is supporting this story. Compaction of the 50-day, 100-day and 200-day EMAs is a classic indication of impending volatility. The asset has historically produced large moves, sometimes doubling in price in a matter of weeks, when DOGE’s moving averages have lined up in this way.
At 48, the relative strength index (RSI) indicates that the market is neither overbought nor oversold. DOGE has plenty of space to run in either direction, according to this neutral reading. The volume of daily trading has also been declining, which frequently comes before a breakout phase.
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The token may spark a rally toward $0.28 and $0.30 if buyers push DOGE above the resistance zone between $0.23 and $0.25. Psychological interest may also encourage attempts to retest $0.35, which were last observed in April.
A decline below $0.21, however, would refute this bullish thesis and expose DOGE to additional declines toward $0.19 or even $0.17.
The next move could be sudden and dramatic because moving averages are tightening the grip on price action and sentiment is still cautious. Whether that leads to a disappointing breakdown or another classic DOGE pump, volatility is all but certain.
As usual, meme coins present both opportunity and risk. Dogecoin’s chart indicates to traders who are keeping a close eye on things that a significant event may be imminent.