The broader crypto market has taken a hit. Major digital assets like Dogecoin are faced notable bearish movements with the dog-themed meme coin dropping to the $0.21 level. DOGE may be under renewed bearish pressure, but a crypto analyst points to an impending notable rally as bullish momentum gradually returns to the market, pushing prices back to $0.22.
Breakout Sets the Stage For Dogecoin To $0.4
Dogecoin appears to have found renewed upward momentum due to the general market recovery following Bitcoin’s brief upswing today. With recent developments spotted on the DOGE 1-day chart, the meme coin is once again flashing signs of strength as it eyes a key breakout.
Related Reading: Dogecoin Price Completes Daily Trend Break, Why $0.42-$0.43 Supply Zone Is Next
An X (formerly Twitter) crypto expert and investor, Trader Tardigrade, has outlined a formation that might redefine DOGE’s short-term price trajectory. As Dogecoin hovers near critical support zones, the expert foresees a sharp breakout toward the $0.4 level.
According to Trader Tardigrade, the meme coin is forming a leg in consolidation below the $0.25 resistance level after recent pullbacks. It is worth noting that this marks the second leg in consolidation in less than a week.
Specifically, the first leg of consolidation occurred last Tuesday after it failed to break above the immediate resistance at $0.25. Trader Tardigrade believes that Dogecoin is likely to break through this level following a shakeout below $0.21 to remove weak hands. However, the expert noted that DOGE would hit the resistance zone several times before breaking through.
When a breakout finally takes place, Dogecoin is expected to rally hard toward the $0.4 mark that was last seen in late January this year due to its previous explosive run. Looking at the chart, this level is another crucial resistance range for DOGE in its bullish journey.
The last time the meme coin reached this key barrier, it caused a major pullback in the following months before DOGE gained traction again in April. In the event that Dogecoin revisits and breaks past the $0.4 zone, it may lead to an extension of the rally as buying pressure grows.
DOGE Makes A Hidden Bullish Divergence
With technical indicators aligning and market sentiment turning cautiously bullish, DOGE might be gearing up for its next major uptrend. Trader Tardigrade also identified an RSI (Relative Strength Index) Hidden Bullish Divergence on the 1-day chart.
Related Reading: Dogecoin Makes Meaningful Correction: Key Pullback Pattern Points To Looming Rally
The emergence of a hidden bullish divergence on the DOGE RSI reflects growing momentum for a bounce even as prices continue to fluctuate. Presently, the expert highlighted that the meme coin is forming a higher low, while the RSI is forming a lower low.
Ali Martinez, another seasoned crypto analyst, has underlined a critical resistance at $0.26 as the meme coin gears up for another upswing. According to the analyst, this level continues to be the most important resistance wall for DOGE. Breaking this level could mark the beginning of a bullish phase.
Featured image from Getty Images, chart from Tradingview.com
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