Dogecoin Has Hit Bottom As Analysts Expect Price to Break Through to $1.16?

Dogecoin has shown signs of recovery after a week of selling pressure and market instability. After slipping below the support zone of $0.1750 in early May, the price of the meme coin has rebounded strongly over the weekend. Analysts and chain indicators are beginning to signal the formation of a local bottom and the potential for a strong bullish reversal. Dogecoin Breaks Downtrend Channel And Retests $0.175 Level On the hourly chart, the price of Dogecoin has broken out of the identified descending channel, ending the short-term bearish trend that has pressured the price for several days. The breakout occurred near $0.1720, a level marked by strong resistance during the day. After the breakout, the price of Dogecoin surged past $0.1750 and is currently consolidating just above that zone. This breakout pattern was first identified by Trader Tardigrade, who pointed out the bullish structure on the one-hour timeframe. This move marks the first technical signal of strength for DOGE since it was rejected from $0.182 at the end of April.

According to the current support levels, $0.1685 and $0.1650 are still important bearish zones to watch. Meanwhile, the upper resistance levels are at $0.1780, $0.1850, and the psychological level of $0.20. If these levels are cleared, analysts believe a mid-term path may form towards $0.50 and beyond. Long-term Analysts Point to the Formation of a Structural Bottom on Dogecoin Price Additional bullish signals have emerged from long-term chart watchers. According to the CEO of Investments, the weekly chart of DOGE/USDT clearly shows higher lows and a trend line retest. The analyst shared a chart indicating that the anticipated breakout could extend up to $1.16 in the next major bullish move, if the current setup holds.

Agreeing with this perspective, the anonymous analyst Astronomer noted that the price of DOGE may have bottomed out after establishing a support level near $0.165. Comparing it to October 2024, when the price of Dogecoin increased by over 500%, this analyst highlighted a similar structure forming now. This argument is based on higher time frame market cycles, with altcoins often finding their lows shortly after Bitcoin.

The astronomer added that holding spot and the risk zones identified near the current level makes the price of DOGE an attractive asymmetrical opportunity. The relative strength index (RSI) on the 2-day chart also shows a slight bullish divergence, which often precedes trend reversals in such macro structures. Whale Activity Raises Speculation About Accumulation Recent on-chain data continues to support the potential for new accumulation. A large transaction involving 100 million Dogecoin, worth about 17.5 million dollars, was transferred to a private wallet earlier this week. This money transfer coincides with an increase in outflows from exchanges, often interpreted as a bullish signal when funds are moved off the platform for long-term storage. While some wallet groups continue to show distribution patterns, particularly those holding 10 million to 100 million DOGE, the wallets holding more have reversed their behavior. Wallets holding between 100 million and 1 billion DOGE have continued to accumulate since April 8. The number of active addresses in the system has not increased much recently. Daily activity is only 3.4% of the peak level from November 2023. Slow retail trading indicates that the retail market still faces many challenges, while larger investors are driving this latest bullish trend. The Data Shows the Difference Between Market Capitalization and Actual Value From the beginning of April to May 6, the market capitalization of Dogecoin increased from 21 billion dollars to 26.4 billion dollars. However, the actual capitalization, measuring the value of the coin according to their final volatile prices, dropped slightly from 21.5 billion dollars to 21.3 billion dollars. In particular, this divergence implies that part of the recent bullish trend has been driven more by speculative trading than by strong fundamental factors on-chain. The bullish trend is being held by confident holders rather than widespread retail demand, as long-term holders have not significantly increased selling activity. According to technical analysts, a strong breakout will only occur when the price of DOGE maintains above $0.1850 and reaches $0.20. A successful journey above $0.1850 will signal a path towards a technical retest from $0.28 to $0.30 and push the market up to $0.50 and $1.16 as all conditions turn bullish.