Over the past week, Dogecoin's price has demonstrated notable fluctuations, showing a 7.3% increase in the last seven days. Analysts point to the possibility of a bullish pattern forming.
Formation of Inverse Head and Shoulders Pattern
According to technical analysis by trader Tardigrade, Dogecoin may be developing an inverse head-and-shoulders pattern, which is a classic bullish reversal signal. The left shoulder and head have already formed, with the right shoulder still under development. Currently, it is crucial to watch the neckline around $0.2460, which links the peak price of the left shoulder with that of the head and represents a key resistance level.
Continuation Signals Based on RSI and Bull Flag
The analysis also highlights that the Relative Strength Index (RSI) for Dogecoin has dropped below 50, suggesting a correction from its previously overbought condition. This is generally seen as a positive sign that may allow the asset to move upward again. Additionally, the price chart shows a bull flag consolidation pattern, indicating a potential resumption of the upward trend after a brief pause.
Increased Network Activity Supports Dogecoin Price
The price surge of Dogecoin is supported by an increase in network activity, as indicated by data from IntoTheBlock. Over the past week, new addresses rose by 102.4%, active addresses increased by 111.32%, and zero balance addresses climbed by 155.35%. This correlation between price rise and network usage indicates that the bullish trend is driven not just by speculation but also by increasing demand and network usage.
Thus, Dogecoin not only demonstrates a price growth but also active network dynamics, which may indicate a recovery and further upward movement.
