DOGE and PEPE Break Key Resistances – Is the Meme Bear Market Over?

DOGE has gained 5.2% while PEPE has gone up by 8.1% in the past day and the two have managed to push the combined market cap of tokens in this category to $47.6 billion.

Meanwhile, trading volumes have gone up by 16% during this period with nearly $4 billion worth of meme coins exchanging hands in just 24 hours.

This rally seems a bit counterintuitive, as they tend to be, to the market’s overall state. The market has been keeping an eye on President Donald Trump’s calls for the resignation of Jerome Powell, current Chairman of the Federal Reserve, as he refuses to lower interest rates.

The President’s hostile measures on the trade front have spooked market participants and have pushed down the price of financial assets in the last few weeks as higher tariffs could result in higher inflation and slower economic growth in the United States.

Powell has said repeatedly that he intends to complete his full term and will not lower rates at the moment until the central bank has more evidence concerning the impact that these trade policies will have on the country’s economy.

Can DOGE Break Its 21D EMA?

Meme coins have been reacting positively as many of them approach their short-term moving averages. A bullish breakout above these key levels – especially if it is accompanied by higher trading volumes – could provide a strong buy signal.

Looking at Dogecoin’s daily chart, the price has bounced strongly off the $0.1400 level for a third time and it is now retesting the 21-day exponential moving average (EMA).

On almost every occasion that the price has tagged this key resistance, it has been pulled down by market forces as bearish sentiment has dominated the scene since December.

Can This Time Be Different?

The volume profile for DOGE shows that this is a high-value area for the token as trading volumes have been strong as the price enters the $0.18 and $0.15 range.

This has been a contested zone for bulls and bears in the past and this increases its relevance from a technical standpoint.

Beware of Another Bull Trap

Momentum indicators favor a bearish outlook as the Relative Strength Index (RSI) currently hovers above its signal line (14-day SMA) while the MACD’s histogram has been in positive territory for a couple of weeks now.

The risk lies in that DOGE has already broken above the 21D EMA multiple times but the rally has fallen short of expectations and has turned out to be a bull trap in all of these past instances.

Hence, as the prevailing sentiment is bearish and the market’s outlook remains highly uncertain, traders should be careful not to get their hopes up and put too much money into a trend reversal until it is fully confirmed.

Meanwhile, if the price pushes through the $0.17 level, this could raise the odds of a retest of the $0.20 area, meaning a 17.6% short-term upside potential for DOGE.

Other meme coins like Pepe (PEPE) would benefit from a Dogecoin rally as the latter is the dominant force in the meme coin segment, meaning that a bull market in one will draw interest to all other tokens in this category.

The correlation of Pepe’s and Dogecoin’s performance on a 30-day basis has stood above 0.80 most of the time and it currently sits at 0.83, meaning that their price behaves quite similarly.

Hence, if a bullish breakout occurs for DOGE, PEPE will benefit although the latter could produce higher gains as it tends to happen with tokens with a smaller market cap and trading volumes relative to the dominant asset (e.g. Bitcoin vs. Altcoins).