Crypto traders are closely following the price action of Dogecoin (CRYPTO: DOGE) following a recent surge in interest for the meme coin.

What Happened: Dogecoin has shown strength in recent times as crypto markets continue to recover from the recent downturn.

Key network metrics of the Dogecoin chain also suggest that trader interest in the world’s ninth-largest cryptocurrency is heating up.

Dogecoin was trading at $0.2410 on Thursday, a 6 percent gain over the past 24 hours.

The rally was part of a broader trend that saw most of the top 100 crypto assets trading in green on Thursday morning. A spike in social media interest also coincided with the meme coin rally.

Crypto trader and analyst Ali Martinez said that Dogecoin may be setting up for a breakout.

“$DOGE appears to be breaking out of a bull pennant, which suggests a target of $0.31!”

Dogecoin's price action has formed a head and shoulders pattern, a classic technical formation that often signals an upcoming breakout. The pattern, which developed over several weeks, saw Dogecoin rally to as high as $0.25.

The asset now appears to be retesting support, with a potential upside target of $0.30.

Why It Matters: Dogecoin's rise also reflects the broader crypto market momentum. Bitcoin (CRYPTO: BTC) rose to a new all-time high of 111,861 dollars on Thursday. Most of the top 100 crypto assets were trading in green, with several posting double-digit gains.

Apart from market-wide trends, Dogecoin is also benefitting from strong technicals and improving on-chain metrics. Whales continue to accumulate the asset. Addresses holding 1 to 10 million Dogecoin have added about 800 million tokens since the start of May.

Network activity also shot up. Active Dogecoin addresses rose by 990 percent over the past week. The sharp uptick comes as Coinbase (NASDAQ:COIN) issued a wrapped version of Dogecoin, known as cbDOGE, on the Base network.

This new version allows users to easily stake, trade, and lend their Dogecoin tokens on Base-based decentralized finance platforms.

Traders are also speculating on the potential approval of several Dogecoin exchange-traded funds, including proposed offerings from Grayscale and Bitwise. This has helped create a bullish outlook among investors.