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Dogecoin started the new year with a staggering 29% surge in domestic demand levels, attracting investors and signaling its resilience in the cryptocurrency market. The meme coin leader is now testing critical resistance around the $0.40 mark, a level that could determine its next move.
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Senior Analyst Pluntz recently shared an insightful analysis, emphasizing that Dogecoin appears to be in a period of strategic accumulation. According to Pluntz, this phase lays the groundwork for an aggressive surge later in the cycle, potentially positioning DOGE for significant gains. These periods of accumulation often serve as a precursor to explosive upward movements, especially for assets with strong community support like Dogecoin.
The coming days will be pivotal for DOGE as it struggles to break the $0.40 resistance level. A successful breakout could ignite a bullish rally, cementing Dogecoin’s position as a market favorite. However, failure to clear this area may lead to consolidation in the short term, delaying the expected rally.
Dogecoin creates a rally
Dogecoin has shown strong upward price movement since early November, defying market volatility and attracting investors’ attention. Even with its recent correction, the price was able to recover, showing growth that confirms its potential for further upside.
Plantz recently Share technical analysis on Xhighlighting the accumulation phase in the DOGE/BTC ratio. According to Blontz, the ratio is “still accumulating,” suggesting that Dogecoin is poised for a significant rally this cycle. Plantz confidently stated that there is “no chance” that DOGE will not rise during this rally, reflecting the analyst’s bullish outlook on the memecoin leader.
While Dogecoin’s path looks promising, it is necessary to recognize the risks associated with it. Volatility remains a hallmark of cryptocurrency markets, and Dogecoin is no exception. The broader economic landscape adds another layer of uncertainty, with rising interest rates, inflation and global economic pressures weighing on investor sentiment. These factors can contribute to periods of sharp volatility in DOGE prices.
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For long-term investors, Dogecoin’s ongoing accumulation phase may provide an opportunity to enter the market before a potential breakout. However, risk management and a cautious approach are vital, especially given the unpredictable nature of both the cryptocurrency market and the global economy. If Dogecoin can break above key resistance levels, it could validate Bluntz’s bullish thesis and cement its position as the top performer this cycle.
Price in consolidation
Dogecoin is currently trading at $0.38 after facing resistance at the $0.40 mark. This level has temporarily halted DOGE’s upward momentum, putting the price into a consolidation phase. Such periods of sideways trading are not uncommon and can last for days or even weeks as the market gathers strength for the next move.
Despite the pause, optimism remains high among investors and analysts. The $0.43 mark appears as a crucial resistance level for DOGE. A clear break above this level could signal renewed bullish momentum, which could push Dogecoin to multi-year or even all-time highs. Achieving this is likely to attract new interest from individual and institutional investors, further cementing its upward trajectory.
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However, the way forward is not without challenges. Market sentiment and broader cryptocurrency trends will play an important role in determining whether Dogecoin can muster the strength to push higher. If the consolidation phase is accompanied by an increase in trading volume and strong buying support, a breakout scenario becomes increasingly likely.
Featured image by Dall-E, chart from TradingView
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