This article is also available in Spanish.
Dogecoin began the new year with an impressive 29% rally from local demand levels, captivating investors and signaling its resilience in the cryptocurrency market. The meme coin leader is now testing critical resistance around the $0.40 mark, a level that could determine its next move.
Related reading
Prominent analyst Bluntz recently shared an insightful analysis, emphasizing that Dogecoin appears to be in a period of strategic accumulation. According to Bluntz, this phase is laying the groundwork for an aggressive rally later in the cycle, potentially positioning DOGE for significant gains. These periods of accumulation are often precursors to explosive upward moves, especially in the case of assets with strong community support like Dogecoin.
The next few days will be pivotal for DOGE as it struggles to break above the $0.40 resistance level. A successful breakout could trigger a bullish rally, reinforcing Dogecoin's position as a market favorite. However, failure to clear this area could lead to short-term consolidation, delaying the expected rise.
Dogecoin designing a rally
Dogecoin has shown strong bullish price action since early November, defying market volatility and capturing investors' attention. Even with its recent correction, the price has managed to recover, showing growth that underlines its potential to continue rising.
Bluntz recently <a target="_blank" href="https://x.com/Bluntz_Capital/status/1875676472314306839″ target=”_blank” rel=”nofollow”>shared a technical analysis on xhighlighting the accumulation phase in the DOGE/btc ratio. According to Bluntz, the ratio is “still accumulating,” suggesting that Dogecoin is gearing up for a significant rally this cycle. Bluntz confidently stated that there is “no chance” that DOGE will not rise during this bull run, reflecting the analyst's optimistic outlook on the meme coin leader.
While Dogecoin's trajectory seems promising, it is essential to recognize the associated risks. Volatility remains a hallmark of cryptocurrency markets and Dogecoin is no exception. The broader economic outlook adds another layer of uncertainty, with rising interest rates, inflation and global economic pressures weighing on investor sentiment. These factors could contribute to periods of strong price fluctuations for DOGE.
Related reading
For long-term investors, Dogecoin's ongoing accumulation phase may present an opportunity to enter the market before a potential breakout. However, risk management and a cautious approach are vital, especially given the unpredictable nature of both the cryptocurrency market and the global economy. If Dogecoin manages to break through key resistance levels, it could validate Bluntz's bullish thesis and solidify its status as one of the best performers this cycle.
Price in Consolidation
Dogecoin is currently trading at $0.38 after encountering resistance at the $0.40 mark. This level has temporarily stopped DOGE's bullish momentum, placing the price in a consolidation phase. These periods of sideways trading are not uncommon and could last several days or even weeks as the market strengthens for the next move.
Despite the pause, optimism remains high among investors and analysts. The $0.43 mark is becoming a critical resistance level for DOGE. A clean break above this level would mean renewed bullish momentum, which could push Dogecoin to multi-year highs or even new all-time highs. Achieving this would likely attract new attention from both retail and institutional investors, further bolstering its upward trajectory.
Related reading
However, the path forward is not without challenges. Market sentiment and broader crypto trends will play a major role in determining whether Dogecoin can muster the strength to rise higher. If the consolidation phase is accompanied by increased trading volume and strong buying support, the breakout scenario becomes increasingly likely.
Featured image of Dall-E, TradingView chart
