Dogecoin (DOGE) is showing strong signs of a bullish rally, as technical indicators and on-chain metrics agree in supporting the upward trend. Currently, DOGE is trading around $0.21 and forming a double bottom pattern per standards on the daily chart, a reversal structure proven through history. This bullish structure appears after DOGE decisively breaks out of a prolonged downtrend channel, confirming a shift in market momentum.
After the breakout, DOGE entered a consolidation phase within the price range of $0.19 to $0.21, which can be seen as a healthy test and hold after the breakout. If the price surpasses the $0.21 threshold, it is likely to pave the way for the next level at $0.25, a crucial level completing the double bottom pattern. This would set the stage for a move towards $0.48, the last recorded price in December 2024.
Notably, the overall structure on the weekly chart further enhances the conviction for this bullish trend. Cryptocurrency analyst Trader Tardigrade pointed out that DOGE is trading in an expanding upward channel, a technical structure known for its potential for parabolic breakouts. The current price action suggests that DOGE is preparing to test and possibly break through the upper boundary.
Based on historical precedents and structural analysis, such a move could lay the groundwork for a rally of up to 300% when the $0.25 level is reclaimed, with $1 becoming a feasible long-term target as DOGE surpasses the $0.47 resistance level.
On-chain data supports the bullish trend.
From the on-chain data perspective, DOGE's metrics reflect this bullish setup. Open Interest (OI) in DOGE futures markets recorded a significant jump in July, from $1.70 billion to $2.85 billion, corresponding to a 67% increase, indicating that speculative activity is returning.
Although OI is rising, funding rates remain neutral, indicating that leveraged Long positions have not overheated the market. Concurrently, the cumulative volume delta (CVD) in the spot market continues to rise slowly, indicating net buying pressure, a positive sign for real demand supporting price action.
Additionally, the Long-Term Holder Net Unrealized Profit/Loss (LTH-NUPL) index has now entered the Optimistic - Anxious sentiment zone. This sentiment zone indicates that long-term DOGE holders are experiencing moderate profits and shifting their emotions from uncertainty (Hope-Fear) to cautious confidence.
History shows that every major breakout of DOGE, including the breakouts in 2021 and 2024, began when LTH-NUPL moved into this zone. This reflects a market where long-term investors begin to reduce selling pressure, allowing short- and medium-term capital flows to drive price action.