Dogecoin (DOGE) could be preparing for a significant rally with a 45% upside potential. In a post on X on Wednesday, analyst Ali Martinez identified a bullish flag pattern on DOGE’s short-term trading chart. The pattern indicates that Dogecoin has support around $0.35. If this level holds, DOGE could rise as high as $0.56, which is great news for traders and investors in the cryptocurrency market.

DOGE Bullish Pattern

The bullish flag pattern on the chart shows a bullish scenario and if the support holds, we can expect further upside movement. In this case, the $0.35 support level is a very important barrier for DOGE as it has held several times during the recent declines.

Marteniz’s analysis builds on this as a foundation for further progress. If DOGE can stay above $0.35, it could even be poised for a move to $0.56, as indicated in the analysis. As of press time, DOGE is trading at $0.3777, representing a 2.75% decline over the past day.

This pattern forms a descending triangle where a series of lower highs meet resistance at $0.35. DOGE’s recent price performance suggests that it has likely found some support at this level as buyers continue to push the price up each time it approaches this level. These consolidations and the bullish flag have increased the likelihood of a breakout. A bullish rally could be seen if DOGE price rises above the current resistance level.

MVRV ratio shows growth

In addition to the bullish flag, Martinez also pointed to the Market Value to Realized Value (MVRV) ratio as another indicator of further upside for DOGE. The MVRV ratio, which measures DOGE’s market capitalization relative to the coin’s cost basis, is currently at 45.65%. Previously, DOGE’s trading peak was when the MVRV ratio was at 78%. This current lower level means that DOGE is not yet in overbought territory for further gains.

The short-term outlook for DOGE remains bullish as long as the price stays above $0.35. The confluence of technical indicators showing strength and a positive MVRV ratio reinforces Marteniz’s bullish view. However, like any other cryptocurrency, the price can be quite volatile and the given forecast may change. For now, however, DOGE traders are focused on the $0.35 level and waiting for a possible breakout to $0.56.