Dogecoin climbed about 5.7%, rebounding from early-week weakness as it tested and defended a long-term support trendline. The meme‑based cryptocurrency rebounded to trade above $0.1016, alleviating some of the short‑term pressure that had driven it below $0.09 earlier in the week.
According to market data from trading platform Mitrade, futures open interest also increased to about $1.18 billion, up more than 3% from the prior session, while positive funding rates signaled that traders were leaning modestly bullish.
The 1-day chart for Dogecoin shows the coin is now experiencing a positive trend. The coin is now trading above the middle Bollinger Band, which is currently near $0.0937. The coin initially declined to the lower Bollinger Band, which is near $0.0876, before experiencing a positive trend.
However, the coin is still facing resistance from the upper Bollinger Band, which is near $0.0998. The upper Bollinger Band for Dogecoin is now a major resistance level for the coin's price movement.
For Dogecoin to break through the current resistance, the coin's price should move above a key level, which is near $0.0998.
According to Analyst Trader Tardigrade, the price has marked the third retest of the historical support level. The analysts said the price retest of this trend line means that it has the potential to become a major entry point for traders.
Therefore, if the price manages to maintain the support level, then there is a high chance that Dogecoin may experience a surge to even higher levels. This will be dependent on a major push from the market.
Analysts also suggest that another rally will be dependent on DOGE trading above the trend line while at the same time clearing the resistance levels that have formed for the coin.
Also Read: Dogecoin News Today: DOGE Holds Near Key Range as Triangle Pattern Puts $0.080 Support at Risk
Although Dogecoin has managed to grow over the last few months, the market cap that has formed for the coin has become a major challenge for the future growth that is expected for the coin. For the coin to rise into the price range between $10 and $15 per coin, it needs a 100x increase in value.
This means that the market cap needs a 100x increase in order for the coin to reach the projected price levels. This will mean that the market cap will be increased to $1.8 trillion, which is almost the same value as Bitcoin. For the growth of Dogecoin to be substantial, the adoption rate needs to be higher. Currently, the usage of DOGE is not substantial. Its usage is mainly to provide a cheaper alternative to Bitcoin.
However, a catalyst for the future growth of Dogecoin could be the integration of DOGE into the X Money platform. If Elon Musk goes ahead to incorporate Dogecoin into the X payments platform, it could boost the usage of DOGE. This could make the cryptocurrency move away from being a speculative asset.
However, the potential for growth notwithstanding, the inflationary model of Dogecoin is still a worry. Unlike the case with Bitcoin, Dogecoin does not have a capped supply. Notably, every year, 5 billion new coins are added to the existing supply. This is an inflationary model, which implies that for the prices to continue to rise, the demand has to far exceed the new supply.