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Dogecoin (DOGE) showed signs of recovery during today's trading session. DOGE has climbed by 3%, rebounding from its recent low of $0.1205 to a more stable price point. The token finds substantial support around $0.118, which is just below the 200-week Exponential Moving Average (EMA). This technical level is crucial as it represents a long-term indicator of support that could dictate future price movements.
On-chain data shows increased development activity around Dogecoin, which means investors and developers are bullish. Development activity often precedes price rises, which means improvements and optimizations within the DOGE network. The market is responding cautiously to these developments with a slight price rise.
Further supporting the bullish view is the amount of Dogecoin held by investors in the $0.098 to $0.121 range, according to IntoTheBlock’s Global In/Out of the Money (GIOM). 194,960 addresses hold 42.19 billion DOGE at an average price of $0.107. This is a solid support zone that will have if DOGE holds.
Technical analysis confirms this view. The RSI dipped below 50 but is stabilizing. The AO is also neutralizing, which means selling pressure is waning and could reverse.
If Dogecoin holds the current support and the favorable market conditions, DOGE could rally to $0.142, which is 13% from current levels. This will test the 50% retracement of the past year. If that happens, it will confirm the support at $0.118 and potentially set up DOGE for further gains to $0.171, a big bullish signal for DOGE.
However, investors should be cautious as a weekly close below $0.118 will invalidate this bullish view and could lead to further declines.
Despite the recent price rise and many in the community being bullish on Dogecoin, a well-known market analyst, Crypto Kaleo, has issued a warning. In his latest market analysis, Kaleo notes that Dogecoin has a history of long periods of sideways movement followed by explosive growth.
According to Kaleo, while the recent gains look good, there is a realistic chance Dogecoin could retrace to the 8-10 cents range in the short term, similar to the 30% drop in August 2020 before the significant price rise. Kaleo says the current bull run could reverse, and we could see a dip that retraces the gains since February. He bases this on the cyclical nature of Dogecoin’s price movements, which has historically shown extensive breakouts 8-9 months after Bitcoin halving. Since the last Bitcoin halving was 2 months ago, he thinks Dogecoin’s big breakout might not happen until December to February.
Despite this short-term dip, Kaleo is still bullish on Dogecoin long-term and thinks it could go to $1 to $2 during what he calls a “meme coin supercycle.” This is a good perspective for investors; we could get short-term gains, but a strategic and patient approach could give us big long-term gains.
