Dog-themed cryptocurrency Dogecoin (DOGE), might be on the brink of a price breakout as it tests a much-watched technical level.

Dogecoin is currently testing the daily Simple Moving Average (SMA) 200 at $0.1337, with the market closely watching for a potential move that could lead to substantial upside gains.

At the time of writing, Dogecoin was up 2.34% in the last 24 hours to $0.1335, mirroring the general rise on the crypto market bolstered by expectations for U.S. Federal Reserve interest-rate cuts.

DOGE/USD Daily Chart, Courtesy: TradingView

As Dogecoin tests this key level, a decisive break could pave the way for significant upside gains, potentially targeting the $0.138 and $0.0000143 levels. A surge beyond these key levels could signal the end of DOGE's current consolidation and the beginning of a new bullish trend.

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The next resistance levels to watch after a successful breakout would be $0.165 and $0.175. Breaking through these levels could further solidify DOGE's bullish momentum and attract more buyers looking to capitalize on the upward movement.

What analysts say

According to crypto analyst Ali, Dogecoin might be playing a repeat of a historical pattern given its current price action. Ali, in a recent tweet, noted that Dogecoin might be playing out a similar pattern seen before, wherein it consolidates in a descending triangle, sees a 140% to 230% rally, and retraces by 56% to 60% before entering a bull run.

While the potential for a breakout might be enticing, it is important to consider the risks. Failure to break above the daily SMA 200 could lead to declines and further consolidation. In such a scenario, DOGE might revisit support levels around $0.12 and $0.124.  

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Traders should also pay attention to the overall market sentiment as any positive developments in the broader cryptocurrency market might provide the necessary momentum for DOGE to break above this much-watched resistance level in the very short term.