Dogecoin price analysis: DOGE poised for trend reversal as 'Diamond Bottom' forms, key monthly support in sight

Dogecoin price is showing signs of an impending trend reversal, supported by new ecosystem developments and a potential ‘Diamond Bottom’ pattern.

What happened, what's next: After a stretch of muted price action, Dogecoin DOGE/USD may be gearing up for a trend reversal, cushioned by positive ecosystem developments.

Crypto trader Trader Tardigrade pointed to a potential “Diamond Bottom” pattern forming on the daily chart, a classic signal of a downtrend ending and an uptrend beginning. He flagged the structure as a key reversal setup.

"Diamond Bottom. Key chart structure for a potential reversal. Depends on what your timeframes are, but I wouldn't be surprised to see this play out from the 30-min chart or 4-hour chart. Depends on what timeframes traders use."

Diamond Bottom. 💎

Key chart structure for a potential reversal. Depends on what timeframes y'all use, but I wouldn't be surprised to see this play out from the 30-min chart or 4-hour chart. Depends on what timeframes traders use. #dogecoin

Meanwhile, another trader, Nebraskangooner, noted that DOGE is currently resting on a critical monthly chart support level and must hold to avoid further downside.

Moreover, Galaxy highlighted that Dogecoin is essential for any true altseason, noting that it recently shifted to higher highs and higher lows after breaking out of a 600-day accumulation range.

As the trend suggests further upside potential, it is worth keeping on watchlist.

"People keep asking what coin is needed for bull season. It's Doge. It has to stay above this monthly chart candle to avoid further downside. It's fibbed out at the 0.618 and broke out of a 600-day accumulation range (which is an inverse Head and Shoulders). We're getting higher lows and higher highs."

People keep asking what coin is needed for bull season. It's Doge. 🐶 It has to stay above this monthly chart candle to avoid further downside. It's fibbed out at the 0.618 and broke out of a 600-day accumulation range (which is an inverse Head and Shoulders). We're getting higher lows and higher highs.

Last week, House of Doge revealed in an X post that the Dogecoin Reserve acquired over 10 million DOGE in just one week, boosting its total stash to 21.3 million DOGE.

Also, according to data from CoinGlass, $4.92 million in DOGE liquidations were reported, with $4.19 million arising from long positions.

Furthermore, daily derivatives volume on major exchanges experienced a notable 9.7% increase.

On DogeOS funding round, a new operating system-like infrastructure layer for the Dogecoin blockchain, just secured $6.9 million in a funding round led by Polychain Capital, according to a report by CoinDesk on Thursday, 31 August.

The report further stated that the new capital will be used to expand the development of DogeOS and support the creation of consumer-facing applications on the Dogecoin chain.

This development comes as part of broader efforts to expand the capabilities of the Dogecoin blockchain beyond its primary role in facilitating cryptocurrency payments.

Announced in March, DogeOS is an initiative focused on expanding the ecosystem of the world's 12th largest cryptocurrency, aiming to introduce new use cases and attract a wider range of developers to build on the Dogecoin chain.

The report added that DogeOS is still in its early stages of development, but it is already being used by several startups to build consumer-facing applications.

MyDoge, a company that allows users to buy, sell and tip with Dogecoin, is one of the first companies to integrate DogeOS into its products.

MyDoge CEO Jordan Jefferson was quoted saying that DogeOS will enable developers to build consumer applications, including in gaming and AI, which can run smoothly and efficiently on the Dogecoin chain.

"We are at a key inflection point in expanding the use cases for Dogecoin and engaging developers to build the next generation of applications on the chain," Jefferson said.