Dogecoin (DOGE) Could Be Gearing Up for a Notable Breakout as Bullish Momentum Builds

Dogecoin (DOGE) price could be gearing up for a notable breakout as bullish momentum builds.

With exchange outflows increasing and trader sentiment shifting to favor long positions, DOGE may be on the verge of reversing its downtrend.

Technical indicators now suggest a 24% rally could be in play if certain resistance levels are broken.

What Happened: Recent on-chain data from analytics platform Coinglass shows that traders are rapidly moving DOGE out of exchanges.

Over the past 24 hours, over $3.75 million worth of DOGE has flowed out of exchanges.

Coins leaving exchanges are usually credited to long-term holders transferring their coins from exchange wallets to private wallets.

Also, a reduction in exchange supply can tighten market conditions and exert upward pressure on prices.

Another positive indicator is the Long/Short Ratio, which stands at 1.116, indicating that more traders are betting on price increases than declines. A ratio above 1 usually signifies a bullish market outlook.

The long bias signals that traders anticipate DOGE to move higher, a sentiment further supported by the current uptick in trading volume.

Over the last 24 hours, DOGE trading activity saw a 15% increment.

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Technical Analysis: Technically, Dogecoin has just broken out above a descending trendline that has acted as strong resistance since January 2024.

For months, DOGE encountered multiple rejections at this trendline, each time triggering selloffs. This week's breakout could be a signal that bearish pressure is weakening.

At the time of press, DOGE is currently trading at around $0.1643, showing a 1.5% increase over the past 24 hours.

If the price manages to close a daily candle above the $0.165 mark, analysts believe a 24% rally could follow, potentially pushing DOGE to the $0.207 level in the short term.

However, DOGE remains below the 200-day Exponential Moving Average (EMA), which is often considered a key indicator of the overall trend direction. Staying below this level suggests that while the short-term momentum may be bullish, the longer-term trend is still in the hands of the bears.

Dogecoin's Relative Strength Index (RSI) is currently at around 50, a neutral reading that indicates the asset is neither overbought nor oversold. This positioning gives DOGE scope to climb higher.

A rising RSI in combination with increasing volume and bullish sentiment could further support a sustained upward move. Traders should watch for confirmation through a clean break above the $0.165 resistance with strong volume.

What’s Next: For traders and investors keeping an eye on DOGE, the $0.165 level is a critical threshold to watch.

A breakout above this level could open the door to a move toward $0.207—a price target that would amount to a 24% rally from current levels.

However, failure to hold above the breakout level or rejection at the 200-day EMA could suggest a false breakout and may bring about renewed downward pressure.