Dogecoin [DOGE] has shown strong signs of breaking out of a falling wedge pattern, sparking excitement among investors.

Valued at $0.127, with a 4.96% increase over the past 24 hours at the time of writing, DOGE has caught the attention of traders.

The important question, however, is: can this bullish momentum push Dogecoin to the anticipated $1.60?

Increase in daily active addresses and volume

One of the most encouraging signs for Dogecoin’s bullish potential is the recent increase in the number of daily active addresses. Over the past 24 hours at the time of writing, the number of active addresses has increased from 50,124 to 52,211.

This increase in network activity reflects growing interest and participation from both retail and institutional investors.

Therefore, this significant increase in the number of daily active addresses shows underlying demand, which could push the price of Dogecoin higher.

This increased network interaction has added confidence in the sustainability of the current bull run.

Additionally, Dogecoin’s trading volume has increased, providing another bullish indicator. Over the past 24 hours at the time of writing, the volume has increased to $2.07 billion, reflecting a 0.35% increase.

Therefore, higher volume shows increasing liquidity and interest in DOGE, which tends to support continued price growth. When volume increases along with price, it usually confirms the strength of the rally.

Therefore, if the volume continues to increase, it could add fuel to Dogecoin's bullish momentum towards the $1.60 target.

Warning signal despite increased volume

However, despite strong on-chain activity and growing volume, Open Interest is down 2.63%, currently at $726.26 million.

This decline suggests that some traders have started to reduce their positions, possibly to take profits or hedge against short-term volatility.

Therefore, while Dogecoin's momentum appears strong, this drop in Open Interest adds a note of caution.

The uptrend remains intact.

Furthermore, recent liquidation data shows a clear bullish bias. Long liquidations reached $728.87k, while short liquidations were just $189.18k.

This gap shows that while some traders are taking profits, the majority remain optimistic about the possibility of further price increases.

Therefore, as long as Dogecoin holds key support levels, this bullish sentiment could continue to push the price higher.

Dogecoin is showing positive signs with increasing daily active addresses, increasing volume and favorable liquidation data.

But traders should keep a close eye on the decline in Open Interest to gauge whether this momentum can sustain and push DOGE towards $1.60.