Dogecoin (CRYPTO: DOGE) has quietly broken out of a long-term descending channel on its daily chart, opening the door for a sustained upside move.

What Happened: The memecoin has been trading within a consistent pattern of lower highs and lower lows since December 2024. However, the coin is now undergoing a retest of the channel’s upper trendline following a modest rally earlier in the week.

Dogecoin could be setting up for a sharp upward movement if it manages to complete a retest of the upper trendline in the coming days, according to technical analysis posted by MMBTtrader on TradingView.

Since hitting a multi-year high of $0.48 in December, Dogecoin has been confined by a descending channel on the daily timeframe. The structure is defined by a series of lower highs and lower lows, which has been largely in favor of a bearish landscape over the past several months, especially as March saw the broader crypto market slide into a steeper downturn in the first half of the month.

However, Dogecoin’s move to $0.205 earlier this week marked its first real attempt at a breakout. The brief rally saw price move above the upper trendline of the channel, also marking a break above the psychological $0.2 price level, which could be seen as the start of a recovery run.

As the month comes to a close, Dogecoin has pulled back slightly from its breakout move above $0.2. The coin has dropped 4.2% in the past 24 hours and is now trading at $0.1746, arriving precisely at the upper trendline of the broken channel. This level now provides support and the outcome of this retest will likely decide the short-term direction for the memecoin.

Analyst MMBTtrader says a “valid breakout to the upside” has taken place, but a bullish trajectory remains uncertain until the retest confirms support. The analyst adds that the short-term bear market environment could yet push Dogecoin lower, possibly toward major buy zones highlighted in green on the chart below, before any substantial rally begins. These buy zones are at $0.13548 and $0.09024.

Breakout Confirmation Could Send DOGE Price Toward $0.4

If Dogecoin manages to hold above this crucial retest zone and sets up for another leg up, the next target will likely arrive at $0.4, based on an order block at the peak of the descending channel. As shown in the Dogecoin price chart above, there is an area of strong selling around this level, and the meme coin could face some resistance here.

Moreover, the analyst also highlights a smaller sell zone between $0.3 and $0.315, but any strong bullish momentum should be able to break through this resistance.

At the time of writing, Dogecoin is trading at $0.175.