Why could DOGE rise 33%?

• Dogecoin price is trading in a bearish wedge pattern, the breakout would signal a bullish move ahead.
• On-chain data shows a bullish outlook as DOGE’s latent wallets are active and the long-short ratio is over one.
• A daily candle close below $0.088 would invalidate the bullish thesis.

Dogecoin (DOGE) is approaching the upper downtrend line on Friday, and a breakout would suggest a rally in the making. The bullish outlook for the dog-themed meme coin is further supported by reactivated dormant wallets and a long-short ratio of over 1.

Dogecoin price looks promising

Dogecoin price is approaching the upper trendline of the bearish pattern. This pattern is formed by connecting multiple highs and lows with a trend line from early March. As of Friday, it is trading at around $0.106.

Let’s assume that DOGE breaks above the upper trendline and closes above the 50-day exponential moving average (EMA) around $0.106. That breakout would signal an uptrend. Dogecoin could rally 33% from current trading levels to retest its daily resistance at $0.141.

The Moving Average Convergence Divergence (MACD) indicator, which shows a bullish crossover on the daily chart, further supports Dogecoin’s bullish outlook. The MACD line (blue line) is trading above the signal line (yellow line), suggesting bulls are buying. Additionally, it shows rising green histogram bars above its neutral zero line, indicating bullish momentum.

DOGE/USD Daily Chart

Analyzing chain data further aligns with the bullish outlook. Coinglass’ DOGE long-short ratio is 1.16, the highest level in nearly a month and crossing over 1 on Friday. This means that more traders are betting on the asset’s price to rise.

Chart of the DOGE long-short ratio

Furthermore, the Sentiment Age Consumed index is in line with the bullish outlook seen from a technical perspective. Spikes in this index suggest that dormant tokens (tokens stored in wallets for a long time) are on the move and can be used to identify short-term local tops or bottoms.

For DOGE, history shows that spikes are generally followed by an increase in Dogecoin price. The most recent rally on August 7 also predicted that the dog-themed meme coin was poised for an uptrend.

DOGE Age Consumed Index Chart

Despite the bullish projection shown by technical analysis and on-chain measurements, if Dogecoin’s daily candlestick closes below $0.088, it would invalidate the bullish thesis. This scenario would see Dogecoin price crash 11% to retest weekly support at $0.078.