Dogecoin eyes a breakout: THIS points to $0.50 target

• Dogecoin’s falling wedge pattern suggested a bullish breakout, but $0.39 remained a critical resistance.
• Weak transaction count and declining MVRV ratios cast doubt on Dogecoin’s breakout potential.

Dogecoin [DOGE] was trading at $0.3542 at press time, down 3.33%, showing potential signs of a bullish breakout. Analysts point to a falling wedge pattern, a classic chart setup often signaling an imminent price surge.

The breakout target is $0.39, a level that could attract renewed market interest. Will this pattern hold true and drive Dogecoin’s price higher?

Is Dogecoin’s price action indicating a breakout?

The falling wedge pattern on Dogecoin’s daily chart highlights bullish potential, with the critical resistance level at $0.39.

If DOGE manages to break out above this point, the next upward target is $0.50, which could mark a significant move for the cryptocurrency.

However, the current consolidation near $0.3542 reflected indecision in the market, leaving traders on edge.

A decisive breakout above the wedge would confirm bullish momentum, but failure to do so could lead to further sideways movement or a retracement.

Source: TradingView

DOGE daily active addresses remain steady, but is it enough?

Dogecoin’s daily active addresses stood at 101,000 on the 23rd of January, reflecting moderate user engagement. This steady activity suggested consistent community interest — essential for price stability. 

However, it lacks the sharp growth typically seen during major price rallies.

Therefore, while daily active addresses indicate a loyal user base, a significant increase in activity is necessary to strengthen bullish momentum.

Source: Santiment

Dropping transaction count raises concerns

The transaction count, however, is declining, dropping to just 62,355 on the 23rd of January. This reduction indicates lower activity on the network, signaling a potential loss of momentum. 

Fewer transactions may lead to reduced market confidence, potentially slowing the anticipated breakout. Reversing this trend will be crucial for DOGE to build upward momentum and attract more attention from traders.

Source: Santiment

MVRV ratio highlights bearish pressure

The MVRV Long/Short Difference has fallen to 32.4%, a clear warning sign for both short- and long-term holders. This declining profitability could discourage new investments and increase selling pressure. 

Additionally, this downward trend suggested that traders were losing confidence, which could undermine DOGE’s bullish potential. Therefore, improving this metric is essential for any significant upward move.

Source: Santiment

Conclusion: can Dogecoin breakout to $0.50?

Dogecoin’s falling wedge pattern provides hope for a breakout, with $0.39 as the key resistance level and $0.50 as the potential target.

Realistic or not, here’s DOGE market cap in BTC’s terms

However, weak transaction counts and declining profitability present significant obstacles.

Although steady daily active addresses suggest continued interest, more robust on-chain activity is needed to confirm a bullish reversal.