Dogecoin Eyes Breakout: Bullish Cues Could Push DOGE Towards February Highs

Dogecoin (DOGE) has been exhibiting potential for a breakout in recent days, fueled by positive market conditions and investor sentiment. Currently trading at $0.25, the meme coin is eyeing a crucial resistance level at $0.26. 

With continued bullish market cues, DOGE may soon make a move toward the next significant resistance at $0.31. Traders are closely watching to see if Dogecoin can break past this level and continue its ascent.

Dogecoin Is Preparing For A Rise

The sentiment surrounding Dogecoin remains mixed. Despite positive signs, the funding rate has been fluctuating between positive and negative, suggesting indecisiveness among traders.

Some traders have been placing more short contracts than long contracts, indicating skepticism. However, as of now, the funding rate is positive, suggesting that traders are currently leaning bullish.

Despite the current positivity, there is still a sense of caution. Traders are not fully committed, given the uncertain direction of the market.

However, the current positive funding rate indicates that Dogecoin holders are expecting a price increase. The fluctuations in sentiment suggest that DOGE’s price movement will be dependent on broader market cues.

Dogecoin Funding Rate. Source: Coinglass

The macro momentum of Dogecoin points toward potential volatility. Technical indicators, such as Bollinger Bands, show signs of convergence, which often signals a period of sharp price movements. With the candlesticks currently below the basis of the bands, this convergence indicates that volatility is likely to drive the Dogecoin price towards a rally.

The bullish outlook suggests that Dogecoin is preparing for an upward swing. While volatility can go either way, the technical setup seems favorable for a price rise. With the increasing market activity and the potential for higher price action, Dogecoin is primed for a breakout. 

Dogecoin Bollinger Bands. Source: TradingView

DOGE Price Aims To Take On The Next Resistance

Dogecoin is currently testing the resistance at $0.26. If it manages to breach this level, the altcoin could make its way to $0.31, a major resistance that it has struggled to surpass in recent weeks.

The increasing volatility is expected to play a pivotal role in helping DOGE break through this level, providing the catalyst for further upward momentum.

Should DOGE continue its rise, the price could increase by as much as 21%, with $0.31 becoming a critical support level for continued rallying. This would signify a strong recovery for Dogecoin, positioning it for a further increase toward $0.40.

Dogecoin Price Analysis. Source: TradingView

However, if the volatility turns negative, Dogecoin could face a sharp pullback. In this case, the price could drop toward the support level of $0.22, invalidating the bullish thesis and delaying any further upward momentum.