Here’s Where Dogecoin Price is Headed Amid Key Bullish Setup

Dogecoin Eyes Breakout as Price and Network Activity Surge

Dogecoin price has demonstrated notable price movement over the past week, showing an upward trend between August 6th and August 10th. The cryptocurrency rose from approximately $0.19 to over $0.23, marking a 7.3% increase over seven days and a 12.5% rise over the last 30 days. 

Despite a recent retracement to $0.22, Dogecoins  price action continues to attract attention. Analysts suggest that a bullish pattern is in the process of formation, with breakout possibilities on the way.

Formation of Inverse Head and Shoulders Pattern

From Trader Tardigrade's technical analysis, it appears that Dogecoins may be developing an inverse head-and-shoulders pattern. This pattern is a classic bullish reversal signal. The left shoulder and head have already been formed, with the right shoulder still under development. 

Source: X

Currently, the most important thing to watch is the neckline, located around $0.2460. The neckline links the peak price of the left shoulder with that of the head, hence making it one very crucial resistance level. This would represent a shift in momentum with the preceding downward trend possibly gaining a reversal, but only if Dogecoin sees a well-volume breakout above $0.2460. 

The breakout would potentially target a price of around $0.26, which would give an upside of 17.4% from the current price of $0.22. For the price reversal to get confirmation, the right shoulder must appear above the head. Therefore, traders are advised to monitor the price action near $0.2460 for signs of either a breakout or failure to break resistance.

RSI and Bull Flag Suggest Healthy Continuation

Meanwhile, another analysis from Trader Tardigrade pointed out a correction in the Relative Strength Index of Dogecoin, which dropped down below 50 in recent times. This suggested that Dogecoins reset from condition of being previously overbought. Generally, technical analysis sees such a reset as a positive sign since it allows the asset to move upward again. This reset may allow Dogecoin to gather strength for a potential rally.

Source: X

In addition, the price chart displays a bull flag consolidation pattern. This pattern, characterized by a downward-sloping blue channel, follows a strong upward move. The price action within this consolidation phase indicates that Dogecoin is taking a brief pause before possibly resuming its upward trend. 

Bull flags can be said to be continuation patterns and hence a breach of this phase might see the price going up further. Provided that the price successfully breaks the consolidation pattern with high volume, Dogecoin might again start with the upward trend to reach the second level at $0.26 and further.

Strong Network Activity Supports Price Surge

It is noteworthy that the sharp rise in Dogecoin price value is backed by a growing network activity. Data from IntoTheBlock depicts an increase in important indicators like New Addresses, Active Addresses, Zero Balance Addresses. In the last seven days, New Addresses were rising by 102.4% and Active Addresses have risen by 111.32, while Zero Balance Addresses increased by 155.35%. 

Source: IntoTheBlock

Such a positive association between the increase in the price and heightening network usage shows that the bullish trend in the crypto is not exclusively by speculation but also by a growing demand and usage of the network.