Dogecoin (DOGE) is once again capturing market attention as its Average Directional Index (ADX) pattern on the weekly chart closely resembles the setup that preceded its last major rally in 2020. Despite short-term price weakness, some analysts believe this technical alignment could signal a significant bullish breakout in the coming months.
Currently, Dogecoin is trading at $0.1737 after a 2.22% drop over the past 24 hours and a 9.08% decline in the last seven days. However, longer-term technical patterns suggest the potential for a reversal.
ADX Weekly Pattern Resembles 2020 Pre-Rally Signal
Crypto analyst Tardigrade recently highlighted a compelling similarity between Dogecoin’s current ADX setup and the one seen ahead of its explosive 2020-2021 bull run. On the weekly chart, the ADX is once again emerging from a low point after forming two mid-level peaks and a subsequent dip—just as it did before DOGE’s historic surge from $0.0025 to nearly $0.70.
According to Tardigrade’s analysis, the current ADX trend is now rising again. If this trajectory mirrors the 2020 pattern, it could set the stage for another major price breakout. The analyst speculates that this could push DOGE as high as $4.50—representing a staggering 2,491% potential gain from its current level.
Also Read: Dogecoin (DOGE) to $1 by September? Analyst Forecasts Major Breakout – Here’s Why
MVRV Score Signals Market Still in Bearish Territory
Not all analysts are ready to call an imminent rally, however. Crypto strategist Kevin points to Dogecoin’s Market Value to Realized Value (MVRV) score, which remains relatively low at 3.5. For comparison, MVRV peaked at 11 during DOGE’s 2017 bull run and hit 16 in 2021—levels typically seen during euphoric market tops.
Kevin suggests that DOGE and the broader altcoin market are still in a bear market phase, held back by ongoing restrictive monetary policy and lingering effects of post-pandemic central bank tightening.
Outlook: Will Dogecoin Break Out?
While Dogecoin’s ADX signal hints at bullish momentum building, macroeconomic headwinds and tepid altcoin sentiment could delay an immediate breakout. For now, traders are watching key resistance levels, with the $0.22 mark from May 2024 serving as an early test of strength.
If momentum continues to build, DOGE may once again surprise the market—potentially validating the bullish $4.50 projection.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses
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