Cover image via U.Today

Dogecoin (DOGE), the dog-themed cryptocurrency, shows potential signs of a trend reversal after a period of decline. Crypto analyst Ali points to a bullish reversal doji forming on the weekly chart – a classic candlestick pattern often signaling a shift in market momentum.

Following three consecutive weeks of decline, culminating in a 30% drop last week, a doji pattern has appeared this week on the Dogecoin weekly chart. This doji suggests market indecision and potentially weakening selling pressure, hinting at a possible price rebound if sustained. DOGE/USD Weekly Chart, Courtesy: TradingView

Ali also noted a surge in Dogecoin's network activity. Active addresses have increased by 47% over the past month, rising from 110,000 to 163,000, indicating growing interest and engagement within the DOGE ecosystem.

Dogecoin Price Action

At the time of writing, Dogecoin is up 2.8% in the last 24 hours, trading at $0.171. After a five-day decline, it rebounded from a low of $0.142 on March 11. This support level is significant, having previously acted as a floor for Dogecoin's rally in early November. This rebound continued into Wednesday's trading session, closing in positive territory.

While this rebound is encouraging, with Dogecoin potentially forming a bullish double bottom at $0.142, overcoming key resistance levels is crucial to confirm a reversal. A break and close above $0.21 could potentially lead to a rise towards the 50-day SMA resistance at $0.25.

However, a looming bearish indicator threatens to negate this potential bullish reversal. Dogecoin is nearing the formation of a "death cross" on its daily chart. This occurs when the 50-day moving average crosses below the 200-day moving average, typically signaling further price drops.

Should this death cross materialize, DOGE could retest lower support levels before any substantial recovery. Currently, the market awaits further price action as Dogecoin navigates the potential conflict between a bullish reversal and a bearish breakdown. Read the original article on U.Today