Dogecoin price is now testing a key resistance trendline after surging by 7%.

This rally has seen bulls pushing above both the 50 and 100 EMA levels.

Buyers have also managed to break through the 38.20% Fibonacci retracement level at $0.1597. This recovery began with a Morning Star pattern on the 4-hour chart.

Following this pattern, prices enjoyed five consecutive bullish candles, leading to a nearly 7% surge.

This upward movement has triggered a positive crossover in the MACD and signal lines. It also sets the stage for a potential bullish crossover between the 50 and 100 EMAs.

Currently, Dogecoin faces resistance at a short-term descending trendline, which is temporarily limiting further gains.

However, as broader market sentiment improves, increased momentum and hype may help propel DOGE prices.

In such a scenario, Dogecoin could break through the overhead resistance confluence formed by the 200 EMA and the 50% Fibonacci level, currently at $0.1680.

If an extended rally pushes past this critical level, the uptrend could reach $0.20, presenting a potential 25% surge. Conversely, prices may retest the psychological support at $0.15 if a bearish reversal occurs.

Interest In DOGE Derivatives Soars As Long Positions Rise

As the broader market anticipates a potential breakout in Dogecoin, interest in DOGE derivatives is surging. Open interest has seen a 3.74% jump, reaching $1.67 billion.

Additionally, the open interest-weighted funding rate has rebounded to 0.0032%, reflecting renewed bullish sentiment.

Over the past 36 hours, the long/short ratio in DOGE derivatives has also seen a significant spike. Long positions have climbed from 46.16% to 51.16%, pushing the long-to-short ratio up to 1.0475.

While this ratio still suggests a neutral outlook overall, the sudden increase in long positions signals growing optimism for a recovery in the meme coin.

However, despite the bullish trends, the upcoming release of a large token batch could pose challenges.

According to Tokenomist, approximately 96.52 million DOGE, valued at $15.32 million, will be unlocked from April 21 to April 28.

This represents about 0.06% of the circulating supply entering the market. With over $15 million in DOGE entering the market daily during this period, the increased supply could present a challenge to the ongoing bullish momentum.