Dogecoin (CRYPTO: DOGE) price is showing signs of a potential rally as bullish momentum picks up.

Here's a look at what happened and what could happen next.

What Happened: Dogecoin is showing signals of a daily trend break with a technical setup that could lead to a strong move, according to Bitcoinsensus via X.

After a healthy and controlled price pullback, Dogecoin is setting up for a fresh breakout, which the analyst predicts could happen in about seven days.

This immediate daily trend break is also supported by a larger technical formation—an Inverse Head and Shoulder pattern. As Bitcoinsensus' chart shows, Dogecoin formed this distinctive technical pattern between March and May 2025.

"The structure of the Inverse Head and Shoulder consists of three major price dips: the left shoulder, which formed in March, the deeper head in April, and the right shoulder, which was completed in early May," the analyst explained. "This formation collectively signals that Dogecoin's market sentiment may be shifting from bearish to bullish."

The key resistance area, which is known as the neckline of the Inverse Head and Shoulder, has already been breached, confirming the pattern. The breakout above the neckline in early May marked the beginning of Dogecoin's broader trend reversal after several months of downtrend and consolidation.

After breaking out of the neckline, Dogecoin executed a textbook retest, confirming its bullish setup. Also, the meme coin broke decisively above a descending trendline that had been acting as resistance since late 2024. This price point has since formed a higher low on the chart, showing buyers were defending the levels.

Dogecoin's next key resistance area is between $0.242 and $0.243—a former supply zone where sellers pushed prices lower. If the meme coin's price can rise towards this level with strong volume, it could trigger a fast and sustained rally to new highs, the analysis said.

Related Link: A Deep Dive Into Dogecoin's Price Action: Decoding The Technicals And Anticipating The Next Move

What Remains: Dogecoin is currently trading at $0.23, and the price signals that a rally could be in the works as bullish momentum picks up, according to crypto analyst Ali Martinez.

As the popular meme coin approaches the critical resistance level at $0.239, it's also forming a potential bullish Triple Bottom pattern in the daily timeframe.

If the price manages to break through this resistance, it could pave the way for a sharp rally towards the next target zone, around $0.251, before reaching the $0.265 level. However, if it fails to break the resistance and instead drops below it, it might lead to a pullback towards the support levels around $0.227, $0.221, and $0.215.