Key Insights:

* Dogecoin (DOGE) price continues to attract investor interest as it holds above a long-standing ascending trendline, active since early 2023.

* After dipping to a 7-day low of $0.1643, DOGE bounced sharply, suggesting buyers started stepping in near critical support at the 0.5 Fibonacci retracement level.

* Analysts are eyeing the $0.165-$0.200 zone as a key area for accumulation, reinforced by technical confluence, market activity, and increased long positions.

Dogecoin price has maintained a consistent uptrend supported by a trendline, dating back to early 2023. This trendline recently aligned with the 0.5 Fibonacci retracement level near $0.165. The confluence of these two technical indicators has increased buying pressure around that zone, resulting in a short-term price recovery.

Ali Martinez, a technical analyst, shared on X: “Dogecoin is known for respecting this trendline since early this year. A pullback to $0.14 could offer a buying opportunity if the trendline continues to hold.”

Dogecoin (DOGE) continues to hold support at the 0.5 Fib. This confluence of technical indicators at $0.165 has seen increased buying pressure. A chart pattern breakout also suggests that buyers have started to exert more influence.https://t.co/8338vcM83q pic.twitter.

— Ben Armstrong (@BitCoinBen) May 5, 2024

According to the weekly candle analysis, the price has bounced multiple times from this area, which means that traders are viewing this zone as a potential long entry point.

At the time of writing, the Dogecoin price showed an 12% increase from the weekly low near $0.20, signaling a short-term bullish reversal.

The bounce also confirmed the relevance of the trendline, as each pullback has resulted in renewed upward momentum. The 0.5 Fibonacci level at $0.165 remains a technical pivot point.

Falling Wedge Breakout Signals Bullish Momentum for DOGE

On the 4-hour chart, Doge has recently fully confirmed a breakout from the falling wedge pattern. This pattern was formed after a sequence of lower highs consecutively accompanied by lower lows in the two-week period.

According to TradingView data, a breakout was confirmed after a four-hour candlestick closed above the upper trendline of the wedge. After the breakout, DOGE price rallied to $0.1810 and continued to push toward the 78.6% Fibonacci level at $0.1860.

Analysts project a move toward $0.2042–$0.2061 based on wedge pattern calculations if that level could be breached. The target was estimated by measuring the wedge’s height and adding it to the breakout level of $0.300.

Market sentiment also follows this template of a bullish breakout. As data highlighted by CoinGlass showed, open interest in DOGE futures increased by 7.19% within a day to touch $1.81 billion.

Further, 67.84% of traders on Binance were long-term traders. The funding rate went back to 0.0051% to send the signal that traders were bullish and willing to pay to hold their positions.

Rising Open Interest and Liquidation Data Reflect Strong Market Activity

From May 5 to May 7, Dogecoin price experienced a decline that led to modest liquidations of long positions. According to CoinGlass, these liquidations occurred as the price fell toward the $0.164 zone.

However, on May 8, the price rose above $0.18. There was also a large short liquidation worth $3.71 million.

The next target of DOGE’s price move could be the $0.300 level, which corresponds to 78.6% of the Fibonacci retracement. However, if bulls can break through this level, the next level of resistance is between $0.2042 and $0.2061.

These levels correspond to the price objective on the micro and mini charts of the falling wedge pattern.

Support levels remain clearly defined. The $0.1729 and $0.1642 zones have acted as recent price floors. The trading activity also suggests strong interest from buyers in these support areas.

If Dogecoin price drops below $0.1642, the next possible retracement could move toward the 0.382 Fibonacci level at $0.1283.