DOGE Breakout Confirmed? New Bullish Signal Emerges

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TL;DR

• Dogecoin successfully retested a descending trendline, confirming a breakout and establishing stability above the $0.24 mark.
• The emergence of both hidden and regular bullish divergences strengthens the short-term bullish outlook for Dogecoin.
• A decrease in active addresses is observed, yet the price remains stable, potentially indicating accumulation by larger, less frequent holders.

Dogecoin Retests Trendline and Holds Above Key Level

Dogecoin (DOGE) is exhibiting a robust structure on the daily chart after a successful retest of a descending trendline. This level, which previously acted as resistance, is now functioning as a support level. The price experienced a bounce near $0.23 and has maintained its position above this level in recent trading sessions.

This trendline has effectively transitioned from a resistance ceiling to a support floor, confirming the validity of the breakout. At the time of writing, DOGE's price was $0.242, reflecting a 2.5% increase over the past 24 hours. After a pullback from $0.27, DOGE is demonstrating resilience, suggesting it is holding its ground instead of entering a more significant retracement.

According to crypto analyst Trader Tardigrade, the daily Relative Strength Index (RSI) has confirmed a hidden bullish divergence. This pattern occurs when the price forms a higher low while the RSI forms a lower low, often signaling that the overall uptrend remains intact despite weakening momentum.

There are no signs of bearish divergence. The RSI has also moved out of the overbought territory, providing DOGE with room for further upward movement without immediate resistance from overextended momentum. These indicators suggest that the recent pullback may have been a temporary phenomenon.

Dual Divergences Appear on 4-Hour Chart

On the 4-hour chart, Dogecoin formed two distinct bullish divergence patterns between July 24 and 26. The first was a hidden bullish divergence, followed by a regular bullish divergence. These patterns were observed within the same price range, further supporting the possibility of a trend reversal.

Source: X

Since then, the price has moved upwards. Buyers have entered the market near short-term lows, and the move above $0.24 validates this positive momentum. The $0.22 level continues to serve as the primary support in this setup.

Fewer Active Addresses, But Price Holds

Data from Glassnode reveals that the number of active addresses on the Dogecoin network has decreased to 58,688 as of July 27, down from over 100,000 in mid-July. Despite this decrease in activity, the price of DOGE has remained stable above $0.24.

Source: Glassnode

This suggests a decrease in the number of users making transactions, but it could also indicate that larger holders are accumulating. Crypto analyst Ali Martinez has pointed out that DOGE has returned to a zone that has historically triggered rallies. A break above $0.25 could pave the way towards $0.36, a level where previous price movements have accelerated.