Dogecoin's price has been testing crucial support levels, hinting at a potential trend reversal. Technical analysis suggests the meme coin may break its current bearish trend, with several indicators pointing towards a bullish move.

Dogecoin Price Support and Potential Breakout

Dogecoin is currently trading steadily above the key support level of $0.16. Trader Tardigrade identifies this as a potential springboard for a bullish cycle. Despite recent minor price dips, the coin's ability to remain above this support suggests further gains are possible.

Importantly, Dogecoin is forming a multi-year ascending triangle, a chart pattern often preceding price breakouts. If Dogecoin surpasses its resistance at $0.17, Tardigrade predicts higher price levels and a trend reversal. This proximity to the resistance area has generated optimism regarding future price movements.

Stochastic RSI Crossover: A Bullish Signal

Another factor supporting a potential Dogecoin trend reversal is the imminent Stochastic RSI crossover. This indicator is crucial; a positive crossover often marks the beginning of a new bullish phase, as noted by analyst Ali Martinez.

Historical data shows that past Stochastic RSI crossovers have frequently preceded Dogecoin price rallies.

The Stochastic RSI is a momentum oscillator measuring the RSI's position within its price range over a specific period. A crossover, where the RSI line surpasses a certain threshold, signals potential upward price movement. A bullish crossover on the weekly timeframe could trigger a sharp Dogecoin rally, mirroring past events that resulted in price increases of 88%, 187%, and 444%. This indicator's significance keeps traders and analysts keenly observant.

Increased Dogecoin Network Activity

Beyond technical indicators, increased Dogecoin network activity further supports a potential trend reversal. New addresses on the Dogecoin blockchain have grown by over 100% in the past month.

This surge in on-chain activity suggests renewed interest in Dogecoin, potentially fueling further price increases. The rise in new addresses indicates improved market sentiment and investor participation, implying increased user engagement – whether through buying, holding, or other uses. This increased engagement could provide the momentum needed to break through resistance levels and initiate a bullish trend.

At the time of writing, Dogecoin was trading at $0.1693, up 0.32% in the last 24 hours.