- Dogecoin surged by a whopping 234.72% over the past month.
- The memecoin must hold the $0.35 resistance level for a rally akin to 2021 levels.
Over the past month, Dogecoin [DOGE] has experienced an explosive surge to reach a yearly high of $0.43.
During this period, the memecoin has surged by a staggering 234.72%, alongside a 91.97% rise on the weekly charts.
However, the recent price action has caused worries of a potential downside. DOGE has declined by 9.67% on daily charts. This has left analysts speculating over the next move.
One such analyst is Ali Martinez, who has suggested that Doge’s uptrend is safe as long as the $0.35 support level holds.
Market sentiment
Martinez posited that DOGE appeared to be creating a bullish flag in shorter time frames.
When an asset displays a bull flag, it suggests a potential continuation of an upward trend.
According to Martinez, for the bull flag to hold, the $0.35 support level must be maintained. This will validate the bull flag and confirm the bullish outlook.
With the confirmation in place, the memecoin will rise by 45% to reach $0.56. Thus, DOGE must hold a $0.35 support level for a further uptrend.
What the price charts say
While the analysis provided by Martinez offers a positive outlook, it’s essential to counter-check other indicators to determine what they suggest.
For starters, Dogecoin’s NVT Ratio (with circulation) has declined over the past month from a high of 582.06 to 111.03. When this declines, it suggests that the network is experiencing more real use and adoption.
This is a bullish signal, as strong network use and transaction volume support price rises, instead of speculation.
Additionally, Dogecoin’s MVRV long/short difference has risen over the past month to reach 62.82%. This often reflects a bullish sentiment, especially like now when the market is rising.
In such conditions, it signals that long-term holders are confident with the market and see a potential price appreciation.
Therefore, the market is still gearing up for a continuation of the uptrend. This would clarify that the decline on daily charts is a mere market correction before attempting another uptrend.
Simply put, the current market conditions favor DOGE and could see the memecoin record more gains. If this favorability holds, the memecoin will reclaim the $0.44 level and see the next resistance at $0.48.
