- Dogecoin is holding steady at the $0.13 support level, with a bullish pennant formation suggesting a potential breakout towards $0.20 or $0.30.
- However, low user engagement and on-chain activity may pose risks to sustaining any upward movement, despite positive technical indicators like the rising Stock-to-Flow ratio.
Dogecoin (DOGE) is currently holding steady at the crucial $0.13 support level, leading many traders to speculate about a potential breakout that could trigger a significant upward trend. While the cryptocurrency faces some challenges, key technical indicators suggest that a breakout might be on the horizon.
Dogecoin Bullish Pennant Formation: A Potential Breakout Signal
Despite experiencing a slight decline recently, Dogecoin has formed a bullish pennant pattern on its chart. This formation suggests that if the cryptocurrency breaks above its key resistance levels, it could see a sharp rise. According to a COINOTAG analyst, if DOGE breaks above the pennant, it could target resistance levels around $0.20 and possibly even $0.30.
As Dogecoin consolidates at $0.13, traders are closely monitoring the chart for signs of upward momentum. The breakout from this pennant could trigger a new phase of price movement, leading to increased interest from both retail and institutional investors.
On-Chain Activity: Is Dogecoin Ready for a Rally?
While the technical chart shows promising signs, Dogecoin’s on-chain activity raises some concerns. The number of daily active addresses remains relatively low at 42,816, and the total transaction count sits at just 20,793. These figures point to a lack of strong user engagement, which could pose a risk to any potential bullish rally.
For Dogecoin to sustain an upward movement, significant user participation and engagement are crucial. Without these fundamental factors, the price might struggle to hold at higher levels, even if the technical structure suggests a bullish outlook.
Key Metrics to Watch: MVRV and Stock-to-Flow Ratios
Two additional metrics could offer insight into Dogecoin’s future price direction. First, the Market Value to Realized Value (MVRV) ratio currently sits at 1.47%, signaling minimal selling pressure from holders. This indicates that many investors are close to their breakeven point, potentially paving the way for upward price movements if demand picks up.
Additionally, Dogecoin’s Stock-to-Flow (S2F) ratio has recently spiked to 69.09, a significant jump from its previous stable range of 29. This increase suggests growing scarcity and could attract long-term investors, further bolstering the cryptocurrency’s potential for future gains.
What’s Next for Dogecoin?
As Dogecoin hovers at the critical $0.13 support level, its price structure points to the possibility of a breakout. While on-chain activity and user metrics could limit the cryptocurrency’s short-term upside, the rising Stock-to-Flow ratio and bullish chart formation suggest a trend reversal is on the cards. If Dogecoin can hold above $0.13 and gain traction from increased market interest, a surge toward $0.20 and beyond could be in the near future.
For now, all eyes are on DOGE’s ability to maintain its support and break free from its current consolidation.
