Dogecoin has had quite a few eventful days in terms of price action, trading volume, trading activity, and investor interest. Dogecoin has led the entire market in inflows, even outperforming Bitcoin over the past week. This momentum has created an attractive shift in Dogecoin's technical outlook, especially with the Bollinger Bands on the DOGE/BTC chart.

This intriguing outlook has been highlighted by cryptocurrency analyst Tony Severino, who pointed out that the Bollinger Bands have tightened to levels not seen in many years. In fact, Severino notes that these bands are currently tighter than before Dogecoin's bull run in 2021.

Dogecoin's Bollinger Bands are squeezed tighter than ever

Bollinger Bands are widely used technical indicators that mark the boundaries of price volatility. When the bands narrow, it often signals low volatility. Conversely, expanding bands indicate high volatility. A squeeze, when the bands move closer together, suggests the asset is trading in a narrow range. In the case of Dogecoin, Severino's observation notes that the Bollinger Bands of DOGE/BTC are currently closer together than ever on the monthly timeframe.

The last time the Bollinger Bands were this tightly squeezed was just before the 2021 bull run, when the meme coin surged exponentially during the meme coin frenzy. According to the historical data of the Dogecoin-Bitcoin pair, if the outcome unfolds similarly to previous price action, Dogecoin may be on the verge of a strong bull run in the coming months, potentially leading to even greater profits than the 2024 bull run.

DOGE breaks out from a three-year channel

As noted earlier, Dogecoin's price surge over the past few days has been impressive. Specifically, Dogecoin has risen 72% to a peak of $0.176, the highest level in over six months. This bullish momentum has allowed Dogecoin to break out of a three-year price channel on the price chart defined by a downward trend line dating back to the 2021 highs. This breakout is significant as it marks Dogecoin's move past a critical resistance level that has restrained its growth since the 2021 peak.

The potential for Dogecoin to increase in price over the coming months has surged due to this breakout, although there is still the possibility of a retest. According to a cryptocurrency analyst on the social media platform X, $2 is the potential peak target if the upward momentum remains intact.

However, it's important to note that there are several resistance levels situated between the current price and this ambitious target. Two notable examples of resistance levels are the 2024 high of $0.22 and the all-time high of $0.7316.

At the time of writing, Dogecoin is trading at $0.1585, which means the price has retraced about 10% from the $0.176 level to retest the breakout threshold of the channel.


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