Dogecoin Nears Bullish Breakout As RSI Signals Possible Short-Term Dip

Dogecoin (DOGE) is on the verge of a major breakout, although traders should approach the situation with caution. In a recent X post, Ali Martinez provided an analysis that suggests DOGE might undergo a short-term pullback before it begins another major uptrend. Based on the analysis, a bullish breakout is expected, though, one has to wait for a minor pullback first.

The Stochastic RSI, a crucial oscillator for determining the overbought and oversold levels, has also gone into bearish territory. This crossover indicates that the price of DOGE may undergo some temporary retracement before continuing its upward trend. Previously, such signals were a precursor to corrections, which is why they are significant for traders.

The latest data on the DOGE/USDT chart shows a descending wedge, a construction that indicates either a breakout or breakdown of the pattern. The DOGE price is currently near the top of this wedge at around $0.107. The resistance line is at $0.115, Dogecoin has to break through this level to validate a bullish trend. According to Martinez’s analysis, DOGE could rise by 45% if the bullish prognosis is to come true, with the target price being $0.157.

Dogecoin RSI Hints Pullback

However, the bearish crossover on the Stochastic RSI indicates that DOGE may experience some pullback before a breakout can be made. He pointed out that the price may reconsider and slide toward the lower support level around $0.095. This level has been tried many a time in the recent past and has shown good strength and is therefore a crucial support level. This support should hold during the correction, and if so, it will pave the way for the much-anticipated breakout.

This potential 45% breakout comes in the wake of a sharp drop in the price of Dogecoin, which had a 45% pullback earlier in the year. This previous downtrend is evident in the chart, and the $0.095 support level has been tested several times by DOGE, which makes it an important level in the future.

Moreover, based on the Stochastic RSI exclusively for the short-term, Dogecoin traders should expect a short-term price decline during the current breakout. Investors should look out for the $0.095 support and $0.115 resistance levels for the next significant moves. In the event that DOGE is able to overcome resistance after the expected correction, the price could skyrocket, thus affording those who are diligent a nice profit.