Dogecoin (CRYPTO: DOGE) price had a third day of gains on Wednesday, reaching the resistance level at $0.20 for the first time since May 30. Its rise continued slightly after Elon Musk expressed some regrets on some of his X posts about Trump, potentially setting the stage for a reconciliation.

If momentum does build, and if there are no new WTI oil price shocks, then we might see an explosive rally to $0.2600, its highest point in May.

Dogecoin is currently trading at $0.20, with CoinMarketCap data showing a 30% surge in 24-hour volume to $1.65 billion. The rally brought its market capitalization to $30 billion.

Dogecoin Price Analysis: In Need Of Momentum For Rally To Continue

The 12-hour Dogecoin price chart shows that the coin bottomed at $0.1660 on June 5 and then started a slow recovery that pushed it to $0.20. This lowest point was also notable since it coincided with the lowest swing on May 6.

Technical indicators are sending mixed signals about DOGE. On the one hand, the momentum oscillator and the Relative Strength Index (RSI) are both pointing upwards, a sign that the trend is strengthening. The RSI measures the speed and magnitude of an asset’s price changes, and is mostly used to identify overbought and oversold levels. Like other oscillators, a rising RSI signals a bullish momentum.

Other indicators warn that the ongoing recovery may not be strong enough. For example, the coin has found resistance at the 50-period Exponential Moving Average (EMA). It needs to flip this resistance to continue the explosive rally. The other red flag is that the Average Directional Index (ADX) indicator has been in a downward trend. It dropped to 21.45, compared to 42 in May this year. A falling ADX line signals that the trend is not strong and is often points to a reversal.

Therefore, the explosive rally to $0.2594 will happen if the coin gains momentum and flips the 50-period moving average. A clear breakout above the initial target at $0.2594 will bring the next key resistance level at $0.4324 into view. This price is the highest level in January and 118% from the current level.

On the flip side, a drop below the support at $0.1660 will invalidate the bullish view and point to a drop to $0.1280, its lowest level in April.

This is a short-term price prediction for Dogecoin (DOGE). For the long-term outlook between 2025 and 2030 – read this.

Potential Bullish Catalysts For DOGE Price

An explosive Dogecoin price rally would happen if there are at least four catalysts. First, it will happen if Bitcoin price breaks out and moves above its all-time high. Such a move would trigger a broader crypto market rally similar to what happened in May when it moved to a record high.

Second, a reconciliation between Elon Musk and Donald Trump would also be bullish for psychological reasons. Musk has already expressed regrets for some of his statements, raising the possibility of some reconciliation. Third, the ongoing DOGE whale accumulation may lead to more gains.

Finally, the approval of spot DOG ETFs filed by companies like Bitwise, 21Shares, Grayscale (NYSE:EQC) and Rex Shares would be bullish as it would lead to more demand.