Dogecoin price has demonstrated signs of bullish momentum after reclaiming its monthly bullish pennant following a recent false breakdown. An analyst pointed out that the recovery keeps the overall continuation pattern intact and could potentially lead to a breakout, while rising spot DOGE ETF flows provide an additional positive signal.
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At the time of writing, DOGE is trading at $0.04991, with 24-hour trading volume of $2.94 billion and a market capitalization of $17.04 billion. The token is down 5.23% over the last 24 hours.
Dogecoin Price Reclaims Bullish Pennant
This setup follows a brief breakdown of the monthly bullish pennant by Dogecoin, followed by a recovery to within the formation. As mentioned by crypto analyst Trader Tardigrade on September 23, the breakdown was a false one and did not indicate a confirmed bearish breakdown.
As per Trader Tardigrade, the re-entry of the price to within the pennant maintains the overall continuity pattern. He refers to the breakdown as a liquidity sweep, in which the temporary breakdown removes positions ahead of the price reverting to its prior range.
The important thing here is that DOGE has not stayed below the pennant. Rather, the rally has taken the price back into the pattern formation.
For Dogecoin, maintaining the formation is critical. A breakout above the top line will indicate that the bulls are taking charge, while a breakout below the formation will cast doubt on the possibility of further advances.
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Dogecoin Price Signals Bullish Momentum as MACD Improves
Bollinger Bands formation also suggests that the market has rallied substantially above its average. DOGE had previously been trading at $0.09956, which is very close to the upper Bollinger Band level at $0.09972. The middle band is at $0.08774, whereas the lower band is at $0.07577.
The MACD indicator also gives a somewhat similar but conservative signal, as the MACD value stands at about 0.00156 against a signal line value of 0.00198, with histogram bars recently turning positive.
This means that there is increasing momentum after the fall witnessed. The only problem is that since the MACD line is still below the signal line, the bullish momentum has not been fully confirmed.
DOGE ETF Inflows Add Another Catalyst
Technical signals are not the only factors drawing the focus toward Dogecoin. An analyst, Crypto Patel, shared that the spot Dogecoin ETFs in the United States experienced an inflow of 11.74 million DOGE, valued at around $1.17 million, on September 22. This inflow was also seen for some other U.S. spot crypto ETFs such as Bitcoin, Ethereum, Solana, XRP, Zcash, Chainlink, and Avalanche ETFs.
The DOGE ETF data point is significant in light of the historical lack of strong demand for Dogecoin-based funds in the United States.
This fact is especially important now, in light of the recently reported ETF inflows. Inflows on a single day do not prove any particular trend, but they serve as proof of institutional demand for DOGE ETFs amidst the problems plaguing the industry.
What Comes Next for Dogecoin Price?
The $0.10 zone is expected to continue serving as a key landmark as the market tries to figure out whether the ongoing recovery can turn into something more significant.
As far as the upside is concerned, the focus will probably continue to be on the top of the pennant and the region surrounding the upper Bollinger Band.
ETF flows will also be key. Positive DOGE allocations in upcoming sessions would mean that there is an increase in demand from regulated investment vehicles. On the other hand, negative or low flows would confirm the historic trend of low demand for DOGE ETFs.
Dogecoin, for the time being, is still in technical limbo. A failed breakdown has been succeeded by a rally within the bullish pennant, although improved MACD readings and ETF inflows serve as other factors worth watching out for.
A breakout to the upside from resistance or another failed breakout to the downside would offer a hint on where things are headed next.
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This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
