The price of Dogecoin may be preparing for a potential bullish move as it approaches a critical resistance level. After completing the price consolidation process, a cryptocurrency analyst suggested that technical indicators point to a significant breakout in the upward direction.
Key factors supporting the bullish outlook for Dogecoin's price
Ghazi, a cryptocurrency analyst on TradingView, predicts that the price of Dogecoin could soon rise to $0.426. Currently trading near a significant resistance level of $0.408, Dogecoin could trigger a strong bullish trend if it surpasses this threshold.
Ghazi revealed that the price of Dogecoin is consolidating, which could set the stage for a potential breakout. He disclosed that the resistance at $0.408 has historically hindered Dogecoin's upward momentum, as the meme coin has continued to test but failed to maintain prices above this level.
According to the analyst, Dogecoin's trading volume will also play a crucial role in confirming the breakout potential. He points out that a bullish breakout could indicate strong buying interest, potentially driving the price higher. Currently, Dogecoin's daily trading volume is $3.01 billion, marking a recent decrease of 3.4%, according to CoinMarketCap.
Ghazi also mentioned various technical indicators, such as the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) of Dogecoin. The analyst revealed that both technical indicators show positive signs for Dogecoin, providing additional support for the potential breakout above $0.42.
Based on the analyst's price chart, if Dogecoin fails to break through the resistance level despite positive technical indicators, the meme coin could drop to a support level of $0.402. Additionally, if it continues to decline below this level, the price could significantly decrease to $0.385.
Breakout confirmation signals to watch for
Although there is a possibility that the price of Dogecoin may decrease further, the analyst remains optimistic that the price consolidation, trading volume, and technical indicators suggest an imminent breakout. Therefore, Ghazi outlined a list of breakout signals for investors and traders to pay attention to.
The analyst emphasized that a decisive close above the key resistance level on a higher time frame, such as the 4-hour or daily Dogecoin chart, will confirm the breakout. Additionally, a significant increase in trading volume during the breakout will confirm buying pressure and heightened market participation.
Furthermore, successfully retesting the broken resistance level at $0.408, turning it into a support zone, will further reinforce the analyst's bullish prediction for Dogecoin from the current price of $0.40 to $0.42.
To prepare for this potential Dogecoin price surge, Ghazi advised traders to set stop-loss orders and adjust their position sizes according to their risk tolerance. These adjustments are crucial for navigating the potential market volatility and preventing financial losses.
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