After a period of consolidation and lackluster price movement, Dogecoin (DOGE) appears to be gearing up for a significant breakout. Recent technical signals, price movements, and macroeconomic trends all point towards a potential bullish reversal for the popular cryptocurrency.
Technical analysis reveals that Dogecoin has broken out of a descending channel that has been keeping a lid on price rallies since the beginning of the year. The successful retest of previous resistance, now turned support, further confirms this breakout and hints at a bullish trend reversal. The next major resistance level for DOGE is at $0.27, with potential targets at $0.39 and $0.43 if bullish momentum continues. On the downside, support at $0.17 should provide a safety net for any short-term pullbacks.
In terms of short-term price action and Elliott Wave analysis, Dogecoin is currently in a micro-corrective phase, holding above a crucial support zone between $0.17 and $0.1777. Analysts have identified a potential three-wave move up, with Wave 3 hitting the 138% Fibonacci extension at $0.196. A break above $0.185 would signal the start of Wave 5, potentially pushing prices towards the 161.8% and 178.6% Fibonacci levels at $0.206 and $0.213, respectively.
Looking at macro trends, there is a growing correlation between cryptocurrency prices, particularly Dogecoin, and the global M2 money supply. Analysts have observed a consistent pattern between increases in M2 and DOGE price rallies, with a 110-day offset showing a strong relationship. As global liquidity expands, money flowing into assets like Dogecoin could further strengthen this correlation, bolstering the bullish technical setup.
Overall, the confluence of technical breakout signals, short-term price action analysis, and macroeconomic trends suggest that Dogecoin is poised for a meaningful rally in the coming weeks. Traders and investors should keep a close eye on key resistance and support levels, as well as broader market dynamics, to capitalize on potential opportunities in the DOGE market.