Dogecoin price is flashing early signs of a breakout, with strong demand and a bullish chart setup hinting at a potential 19% rally in the short term.
Summary
- Dogecoin price rebounded 17% on Monday after visiting a three-month low over the weekend.
- The rally coincided with a broader market recovery as concerns over US-China trade tensions cooled.
- A bullish pennant pattern has formed on the 4-hour chart.
After falling by 33% over the past week to a three-month low of $0.18 on Oct. 12, Dogecoin (DOGE) price rebounded 17% to an intraday high of $0.21 on Monday. At its current price, the token is still 54% below its December high of $0.46.
Dogecoin price bounced back alongside a broader crypto market recovery, as investor nerves eased following fresh comments from former U.S. President Donald Trump. In a recent Truth Social post, Trump mentioned that the U.S. government was in talks with China regarding the controversial 100% tariffs set to take effect on key Chinese rare earth metal imports starting Nov. 1.
The post helped calm fears of an all-out trade war, triggering a rebound across crypto assets. Bitcoin (BTC) climbed back above $115K, while Ethereum (ETH) and BNB (BNB) posted gains of 9% and 16%, respectively. The recovery also spilled into the meme coin sector, helping lift the total crypto market cap back above $4 trillion.
The leading meme coin by market cap also drew strength from a loyal investor base committed to holding the token. According to data from CoinGlass, Dogecoin has seen 10 days of exchange outflows since the start of this month, with over $440 million in net outflows during that period.
When the balance of a token held on exchanges continues to drop, it means that investors are moving their holdings to self-custody wallets, likely with no intention of selling in the short term. It could reduce immediate selling pressure on the token and help fuel further gains for the token if retail demand remains intact.
On the 4-hour chart, Dogecoin seems to be forming a bullish pennant. In technical analysis, the structure is formed when an asset’s price rises sharply, followed by a brief consolidation. A breakout from such a setup leads to a continuation of the upward trend, potentially triggering a fresh leg higher.
As of press time, DOGE was hovering near a breakout point around the $0.21 level, testing the upper boundary of the pennant.
Momentum indicators like the MACD and RSI also seem to support a bullish outlook for DOGE, at least in the short term. The MACD line has formed a positive crossover with the signal line, hinting that momentum is shifting from sellers to buyers. The RSI, lying close to the neutral territory, suggests the token still has plenty of room to run before reaching exhaustion.
As such, Dogecoin could likely target a move to $0.25 next, a level that aligns closely with the 200-day SMA and lies 19% above the current price level.
A drop below the $0.20 psychological support would invalidate the setup, potentially triggering a more bearish reversal.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
