One expert believes Dogecoin is on the verge of a major price rally not seen since December 2021, as the cryptocurrency landscape has shown it is ripe for a breakout.
Crypto analyst Ali Martinez weighed in on the currency’s technical outlook, saying that Dogecoin’s price could rise to 200% in the coming weeks if the current pattern of indicators continues.
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Dogecoin price on the rise
Martinez noted that Dogecoin was able to break out of a multi-year downtrend by noting that this often led to an increase in the price of the meme coin. He noted that historically, the coin’s price has risen 200% after breakouts.
History often repeats itself and #Dogecoin may be doing just that.
A familiar pattern: breakout from a multi-year descending triangle, 200% rise, 60% retracement – then a bull run.
After a recent 65% pullback, $DOGE could be getting ready for the next big rally! pic.twitter.com/c93A4Fec7V
-Ali (@ali_charts) October 6, 2024
He predicted that Dogecoin could potentially surpass the $0.2236 mark, a level not seen since December 2021.
In late September, the token suffered a breakout, leading to a 25% price increase. However, Dogecoin was unable to sustain the price rise, falling once again to $0.11.
Other analysts shared the same prediction, saying that if the coin successfully broke through the $0.1120 level, it would likely easily surpass the $0.1315 mark this month.
However, analysts urged traders to be cautious about the potential recovery in Dogecoin prices, noting that a 60% pullback usually preceded previous breakouts before gaining momentum for an upward trend.
A key driver of growth
An increase in active Dogecoin addresses is the main reason why analysts are betting on a possible big rally in the cryptocurrency’s prices.
Martinez revealed that active DOGE addresses recorded their highest level in the last eight months, rising to 133,880.
Active #Dogecoin Addresses recently increased to 133,880 – the highest level in 8 months! pic.twitter.com/DojEsDscXk
-Ali (@ali_charts) October 12, 2024
This increase in active addresses indicates that people are regaining interest in the currency, seeing a recent increase in new users. This also implies that additional traders are helping to drive the token’s growth.
For example, around 110,000 investors have flocked to Dogecoin, putting the token ahead of its cryptocurrency rivals Shiba Inu and Pepê. The growth in trading volume showed that the currency is regaining its appeal for traders looking for a quick profit.
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Increased whale activity
Experts also see whale activity as another factor in Dogecoin’s resurgence. In more than a week, whales, major holders of the meme currency, accumulated at least 2.07 billion DOGE, the largest since January.
The accumulation demonstrated traders’ growing confidence in the token. In past cases, large purchases often resulted in significant price adjustments, serving as indicators of upcoming market trends. One analyst noted that whales don’t make large purchases unless they see a price increase in the future.
Featured image from CNBC, chart from TradingView