Dogecoin has rebounded strongly after hitting a crucial support level, reinforcing bullish expectations laid out in a recent technical analysis. The popular meme cryptocurrency, which suffered a sharp decline last week, has defied concerns of an extended decline by bouncing off the $0.16896 reversal zone and now climbing toward higher levels. Now trading at $0.22, Dogecoin’s price action appears to align with a Cup & Handle formation, which is setting the stage for an extended rally.
Dogecoin Bounces Off Key Reversal Zone
A crypto analyst on social media platform X highlighted Dogecoin’s approach to a key support level in light of last week’s crash. This notable price crash saw Dogecoin lose its support levels around $0.20 and $0.20 in rapid succession. With this, the analyst noted that the meme coin is approaching the most crucial support at $0.16896, where it has the highest likelihood of bouncing upward.
As predicted, DOGE found stability just before hitting this level and has since trended upward, now in the process of forming a Cup & Handle pattern. This classic bullish structure often precedes significant breakouts, with the analyst now eyeing a move above resistance levels as confirmation.
Notably, the next crucial test at this point is at $0.29124. The reaction to this resistance will be crucial in determining whether DOGE can sustain its recovery and push toward new highs. A decisive breakout above this level could ignite further bullish momentum and bring more bullish price targets into play.
Next Major Resistance Could Trigger Rally Toward $0.50 And Beyond
Following the bounce from support, the analyst outlined a long-term bullish scenario, projecting a rally towards $0.50 and $0.60. A move to $0.50 would mark Dogecoin’s highest price level in years while also representing a significant breakout beyond $0.48, where it faced rejection in December 2024. From here, long-term targets are beyond $0.6 and a new all-time high above its current peak of $0.737.
Nonethless, Dogecoin still has hurdles to clear, particularly at $0.29124. Even if Dogecoin bulls manage to break above this barrier, there is also the possibility of a retest before the next leg of the rally gains traction.
The broader market sentiment also plays a role in Dogecoin’s trajectory. At the time of writing, Bitcoin and other major cryptocurrencies are starting to recover from last week’s decline after the announcement of a US crypto reserve. The bullish environment could support Dogecoin’s climb to new highs, and the meme coin could easily reach a new all-time high before the middle of the year.
At the time of writing, DOGE is trading at $0.2178, up by 5.8% in the past 24 hours, but still down by 5.3% in a seven-day timeframe.
Featured image from iStock, chart from Tradingview.com
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