Dogecoin Maintains $0.13 Support Amid Speculation on Potential Breakout and Market Trends

• Dogecoin remains under pressure at the $0.13 support, as market participants eagerly await signs of a breakout that could signal a new upward trend.

• Despite a recent downturn, Dogecoin’s bullish pennant formation suggests potential for significant price movement if key resistance levels are breached.

• “If DOGE breaks decisively above the pennant, it could target resistance levels at $0.20 and potentially $0.30,” said a COINOTAG analyst.

As Dogecoin holds at $0.13, traders analyze market signals for a potential breakout towards $0.20, driven by a bullish pennant formation.

Is DOGE preparing for a major trend reversal?

At the time of writing, Dogecoin was trading at $0.1446, marking a 4.90% decline in the past 24 hours. However, the overall structure indicates a potential bullish breakout, with DOGE positioned at the edge of a falling pennant formation. This technical setup has historically signaled trend reversals, particularly when backed by strong support and improving market sentiment, as indicated by the significant $0.13 level.

If DOGE manages to break decisively above this pennant formation, traders could see targets around $0.20 and possibly $0.30 in the upcoming weeks, making the current levels critical for future price action.

Source: TradingView

Are user metrics strong enough to support a rally?

Unfortunately, Dogecoin’s on-chain activity has not kept up with the bullish technical structure. As of now, daily active addresses are at a modest 42,816, while the total transaction count is struggling at just 20,793. These figures highlight a concerning lack of engagement among users, posing risks for sustained upward movement.

Hello! Although price action appears promising, substantial participation from the user base is essential to validate any potential bullish breakout. Without strong fundamentals and active user engagement, the favorable price movements may not sustain, and DOGE could face exhaustion before reaching higher targets.

Source: Santiment

Is the MVRV ratio signaling undervaluation?

Dogecoin’s MVRV (Market Value to Realized Value) ratio currently stands at 1.47%, indicating that most holders are nearing their breakeven point. This data suggests minimal selling pressure from those looking to take profits, which could be a constructive sign for the market.

Historically, MVRV levels at or near this range have often foreshadowed upward price movements. However, the absence of significant accumulation by larger holders might continue to limit upward momentum unless new interest emerges in the market.

Traders should be vigilant regarding this metric. An increase in the MVRV ratio could indicate a shift in price dynamics that might precede favorable trading conditions.

Source: Santiment

What does the spike in the Stock-to-Flow ratio mean?

The Stock-to-Flow ratio for Dogecoin has surged to 69.09, a significant increase from the previously stable range of 29. This sharp rise indicates a shift in perceived scarcity, which may attract the attention of long-term investors looking for undervalued assets.

An increasing S2F ratio frequently corresponds with price appreciation, especially if supported by positive market sentiment. Therefore, this recent spike could be an early signal of renewed accumulation within the Dogecoin market.

Moreover, it suggests that the dynamics of DOGE’s supply are becoming more favorable for potential price gains in the near future.

Source: Santiment

What next for DOGE

As Dogecoin hovers around a vital support zone, it is strengthened by key technical signals such as an upward trendline and the important 61.8% Fibonacci retracement level. While the on-chain metrics indicate some weaknesses, the prevailing price structure offers a realistic potential for a trend reversal.

The increase in the Stock-to-Flow ratio further bolsters a bullish stance, suggesting a resurgence of investor interest in DOGE. However, to experience a substantial rebound, Dogecoin will require improved user engagement and increased transactional activity to validate its current support level. If it can sustain the support at $0.13 and confirm a breakout, the likelihood of upward movement increases dramatically.