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Dogecoin (DOGE), one of the most popular meme coins, is teetering on the edge of a major breakout. However, traders are being cautioned to approach this situation with vigilance, as a short-term pullback may occur before DOGE begins its upward journey. In a recent analysis shared on X (formerly Twitter), renowned crypto analyst Ali Martinez suggested that despite the optimistic outlook, traders should be ready for a minor correction before the bullish breakout materializes.
Stochastic RSI Signals Temporary Retracement
The Stochastic Relative Strength Index (RSI), a key oscillator used to identify overbought and oversold conditions, has now entered bearish territory for Dogecoin. This crossover in the RSI points toward a potential price retracement in the short term. Historically, such signals have foreshadowed corrections, and traders are closely monitoring the market for this scenario to play out.
According to Martinez’s analysis, while Dogecoin is poised for a bullish breakout, it’s essential to acknowledge the possibility of a temporary pullback. He noted that DOGE’s price may dip before resuming its climb, making this a critical time for investors to stay alert.
The DOGE/USDT chart paints a clear picture of Dogecoin’s current position. The formation of a descending wedge—a pattern that often signals a breakout or breakdown—is now in focus. At the moment, DOGE is hovering near the upper boundary of this wedge at approximately $0.107. For the anticipated breakout to be confirmed, Dogecoin must overcome the resistance level at $0.115.
If DOGE manages to break through this key resistance, Martinez predicts a potential surge of up to 45%, with the target price projected at $0.157. However, the looming bearish crossover on the Stochastic RSI suggests that traders should prepare for the price to briefly dip before gaining momentum.
Key Support Levels – $0.095 Crucial for the Breakout
Martinez also highlighted a crucial support level that could act as a safety net during this period of volatility. DOGE has consistently tested the $0.095 support level, which has proven to be resilient in the past. This level is expected to hold firm during the short-term correction and could serve as a launchpad for Dogecoin’s much-anticipated breakout.
The importance of the $0.095 support cannot be overstated, as it has historically provided a solid foundation for DOGE during market pullbacks. If the price holds at this level, it will pave the way for the predicted surge to $0.157, offering significant profit potential for traders.
A Path to a 45% Rally?
This potential breakout comes on the heels of a 45% pullback earlier in the year, a steep decline that tested the resolve of Dogecoin holders. With the $0.095 support level holding steady in previous corrections, many are hopeful that DOGE will be able to withstand any short-term fluctuations and rally toward new heights.
Also Read: Dogecoin Surges 10.5% In Exchange Net Flow – Can 73% Of Profitable Holders Push Prices To $0.12?
The current Stochastic RSI hints at a possible short-term decline, but traders should keep a close eye on the key levels. A dip to $0.095 followed by a successful breakthrough of $0.115 could mark the beginning of Dogecoin’s next major rally.
For now, patience and caution remain the order of the day. If DOGE manages to break free from its resistance after this brief correction, traders who play their cards right could see substantial gains as the meme coin gears up for a potential 45% breakout.
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.
Crypto and blockchain enthusiast.
