The Internet’s most loved alt- Dogecoin has been on a wild run in 2021 so far. Its leap into the top 10 rankings shortly after the GameStop short squeeze was a major talking point within the crypto space. While the alt did suffer a major setback in mid-May, bulls have successfully managed to negate several bearish setups on DOGE’s weekly and daily charts.
Now in recovery mode, DOGE needed to close above a critical level before any talks of the next rally. At the time of writing, Dogecoin traded at $0.28, down by 0.1% over the last 24 hours.
Dogecoin Daily Chart
Source: DOGE/USD, TradingView
DOGE’s horizontal channel has had three points of contact so far and bulls seem to be inching towards an upwards breakout. The only level that has the potential to negate DOGE’s bullish thesis was present at the 23.6% Fibonacci level ($0.30), a close above which would push prices towards the next critical resistance zone at the 50% Fibonacci Extension at $0.450. Additional targets reside at the 61.8% and 78.6% Fibonacci Extensions of its 22nd July low. In case of an immediate pullback, support can be found at the mid-line of its pattern at $0.224.
Reasoning
Awesome Oscillator has registered six straight bars above the half-line for the first time since early-May- a sign that bulls were making progress despite DOGE’s rangebound behavior. The Directional Movement Index concurred with DOGE’s movement and suggested that an uptrend was solidifying in the market. Finally, the MACD also traded above the half line and presented buy signals for long-term traders.
Conclusion
Dogecoin was making inroads towards a horizontal channel breakout and a favorable outcome was backed by its bullish indicators. Traders must be on the lookout for a rise above the 23.6% Fibonacci level and can place longs once a breakout is confirmed.
