Dogecoin (DOGE), the meme-inspired cryptocurrency, has been making waves recently with a double-digit price increase over the past week. But could this be just the beginning of a much larger rally? One analyst believes so, predicting a potential 66% surge in the coming weeks.
Bullish Pattern Hints at Breakout
Dipayan Mitra, a crypto journalist, points to a bullish falling wedge pattern that has emerged on Dogecoin’s chart since March. This pattern typically signifies a period of consolidation followed by a potential breakout. As DOGE approaches the resistance level of this pattern, anticipation is building for a significant price increase. A successful breakout could propel the memecoin 66% higher, according to World Of Charts, a popular crypto analyst.
Mixed Signals: Bullish Sentiment vs. Bearish Metrics
Despite the recent price uptick, DOGE’s social media sentiment remains surprisingly negative. This suggests that a significant portion of the market still harbors bearish sentiment towards the token. However, several technical indicators paint a more optimistic picture. The coin’s social volume has spiked, reflecting a rise in popularity, and the MACD indicator suggests a bullish advantage in the market. Additionally, the Money Flow Index (MFI) and Chaikin Money Flow (CMF) both show positive signs, hinting at a potential continuation of the price rise.
Can the Bulls Overcome Resistance?
While the indicators are encouraging, there are some bearish factors to consider. AMBCrypto’s analysis reveals a decline in the long/short ratio, indicating a rise in short positions among traders. This suggests potential resistance to a breakout. Additionally, the funding rate for DOGE has increased sharply, which can sometimes foreshadow a price dip.
MVRV Ratio: A Beacon of Hope
However, a silver lining exists in the form of the MVRV ratio, which has increased in recent weeks. This metric is often interpreted as a bullish signal, suggesting that the current price may be undervalued.
The Verdict: A Cautiously Optimistic Outlook
While Dogecoin’s future trajectory remains uncertain, the technical indicators and the falling wedge pattern offer a compelling case for a potential breakout. However, the bearish sentiment and metrics like the funding rate urge caution. Only time will tell if the bulls can overcome the resistance and propel DOGE towards a 66% surge. Investors are advised to conduct their own research and consider all factors before making any investment decisions.