Dogecoin (DOGE) Breaks Out of Its Downward Trend, Sparking Optimism Among Investors and Analysts

The popular meme cryptocurrency has shown strong technical signals that point to a potential upward move.

Dogecoin (CRYPTO: DOGE) price broke out of a Descending Channel pattern on the 3-day chart, which could be shifting the technical momentum from bearish to bullish.

Dogecoin had been trading in a Falling Wedge pattern on the 4-hour chart since late 2023, which it confirmed by breaking to the upside and sparking a rally that peaked at around $0.45. After this breakout, Dogecoin traded in a Descending Channel.

The cryptocurrency faced multiple rejections at the upper boundary of the channel but broke through with strong technical candlestick formations and volumes.

Dogecoin is facing minimal overhead resistance based on its current bullish structure. A breakout of the channel could cause a swift rally.

Network Activity Explodes

On-chain data from Glassnode revealed that Dogecoin experienced a remarkable 528% increase in active addresses on May 13, shooting up from 74,640 to 469,477.

This surge followed an update concerning 21Shares' application for a spot Dogecoin ETF, which the U.S. Securities and Exchange Commission acknowledged.

The financial services firm confirmed that the financial services firm had completed an administrative filing for a spot Dogecoin ETF, which the SEC had accepted.

The filing aims to track the price of Dogecoin and follows similar endeavors by Bitwise and Grayscale to launch crypto ETFs. This move suggests the potential for mainstream adoption of the meme cryptocurrency.

The news sparked optimism among investors and traders, leading to an increase in Dogecoin's network activity. This kind of address growth is often a precursor to price movements.

In the futures markets, there is also strong interest in DOGE. According to Glassnode, Dogecoin futures open interest rose by 70% over the last week, climbing from $989 million to $1.65 billion.

This increase occurred despite a setback in price from recent highs, suggesting that traders are continuing to bet on further price appreciation. The decoupling of open interest and price indicates persistent speculative positioning.

DOGE has also seen strong spot-buyer demand. Data from CCCoinsights shows that Dogecoin's spot taker 90-day cumulative volume delta is currently "taker-buyer dominant."

This finding indicates that there is more volume on buys than sells, highlighting more aggressive buying activity since early March. A similar pattern emerged during a 385% rally to $0.48 in Q4 2024.

Key Price Levels

On-chain analyst Ali Martinez identified key Dogecoin levels using the UTXO Realized Price Distribution. This metric demonstrates how much of the asset's supply was last purchased at different price levels.

According to the data, there aren't any notable cost basis centers immediately above the current price until $0.36, where investors last bought about 3.8% of all DOGE tokens in existence.

This observation suggests that $0.36 could pose a major resistance level for Dogecoin in its current uptrend.

Below the current price, the closest support level appears around $0.21, which hosts the acquisition point of 7.5% of the DOGE supply.

If the bears manage to overwhelm the bulls and drive prices lower, this support zone might come into play.

Another crypto analyst, Trader Tardigrade, noted that DOGE has hit a key resistance level around $0.24. A brief consolidation is expected over the next few days.

A breakout above this resistance could propel DOGE to $0.40, signaling healthy upward momentum.

Meanwhile, Dogecoin proponent Kriss Pax highlighted an inverse head-and-shoulders pattern on the 1-day chart. This pattern suggests a potential surge to $0.42.

Finally, crypto analyst Ace of Trades indicates that DOGE is showing early signs of a major trend reversal. Based on the Wyckoff market schematic, the analyst suggests that the meme coin has officially exited the accumulation zone and entered the mark-up phase on the weekly chart.

For most of 2022 and 2023, Dogecoin traded sideways in the accumulation zone. However, recent bullish activity has pushed its price firmly into the mark-up territory.

If momentum holds, DOGE could continue its upward trajectory toward the upper boundary of the mark-up zone, with the next key resistance at $0.34. Beyond that, the path to the distribution zone above $0.60 becomes clearer if volume and market interest continue to grow.

At the time of writing, Dogecoin is trading at $0.237, up more than 37% in the last seven days.