Dogecoin Price News: DOGE Bounces Off Key Trend Line Support – Will It Keep Rallying?

Trading volumes are nearly unchanged in the past day but most other meme coins are rallying as well.

Notable winners include Pepe (PEPE), whose price is rising by 10%, while Fartcoin (FARTCOIN) and SPX6900 (SPX) have gone up by more than 25% each during this same period.

Despite the surge, the aggregated market cap of meme coins is still sitting below the $50 billion level as investors have turned their backs on this category temporarily.

Market sentiment remains heavily depressed as the Fear and Greed Index once again dropped below 30 and currently sits at 24 as the most recent selling spree triggered warning signals that the downtrend that started in December has enough strength to keep going four months later.

During a recent speech, Elon Musk, an influential figure in the Dogecoin community as he has shown support for the project multiple times in the past, claimed that it was a coincidence and that there are no plans for the government to use DOGE in any way.

Even though this would have been bearish for DOGE in most scenarios, it appears that buyers are ignoring these comments and have kept piling on the meme coin.

Dogecoin Could Rise to $0.2060 If This Support Holds

Moving to the charts, Dogecoin’s former trend line resistance has now been acting as support for the latest decline, emphasizing its relevance to market participants.

After dropping for four days in a row, DOGE has now bounced off this line but momentum seems to be still favoring bears as the Relative Strength Index (RSI) has retested the signal line from below.

The MACD’s histogram shows that positive momentum has been fading as reflected by a series of increasingly lower light green bars.

If DOGE resumes its rally from this point on, it would confirm this bullish breakout, especially if the next few sessions are accompanied by above-average trading volumes.

The most relevant near-term target for DOGE in the daily chart would be the $0.2060 level – its nearest lower high. This would mean a 22% upside potential from current levels.

In addition, the price is bouncing off the 61.8% Fibonacci level, which makes it even more important for DOGE to stay above this area as it could otherwise risk a sharp drop to the $0.1430 support level.

American Traders Go Stop-Loss Hunting

The hourly chart shows that DOGE is experiencing a significant drop during the American session and is already defying the recovery.

However, this could be a liquidity trap where bulls try to trigger as many stop orders as possible to push buyers to re-enter their long positions or trap bears in the process.

Momentum has now turned against bulls as a result of this drop. The Relative Strength Index (RSI) moved below the signal line while the MACD’s histogram moved to negative territory for the first time in the past 24 hours.

If the price stays above the 61.8% Fibonacci, this would provide an attractive opportunity to open a long position if a retest of the most recent higher high is expected. The risk-reward ratio for such a trade would range from 1.7 to 3 depending on where the stop price is set.