According to cryptocurrency analyst Kevin (@Kev_Capital_TA), a key technical development on the Dogecoin (DOGE/USD) chart could indicate a bullish move if current support levels hold. After about a month of declines, DOGE appears to be bouncing off the channel’s former resistance line – an event that often attracts the attention of traders looking for gains.

Dogecoin price ready to skyrocket?

On Sunday (January 19) Kevin excellent that Dogecoin has “traded in a bearish channel for over a month” and is “currently backtesting” the upper boundary of the channel. He stressed that it was crucial for DOGE to “keep it up and bounce back,” noting that failure to do so could force a “re-evaluation” of the chart.

So far, the cryptocurrency appears to be doing well in defending its newfound support. DOGE briefly dropped to around $0.345 before closing two four-hour deep wick candles back above the trendline. Kevin noted this “nice retest bounce” and its consistency with key four-hour moving averages, which suggests the potential for higher prices.

At press time, Dogecoin is hovering around the $0.38-$0.39 level, showing resistance to former resistance-turned-support. Kevin noted: “Dogecoin is seeing a good bounce following a retest of a bearish channel that I am tracking along with its key 4HR moving averages. Very nice.”

Despite Dogecoin’s promising technical setup, Kevin emphasized that altcoins remain highly dependent on Bitcoin’s direction and market dominance. He addressed the ongoing cryptocurrency cycle, claiming that “we have never been in a transition period” in this bull market. According to Kevin, altcoins will not “sustainably outperform the king” unless BTC dominance drops below the 54.51% threshold and USDT dominance drops below 3.7%.

He also noted that Bitcoin’s dominance was approaching 59%, effectively “attacking the macro gold pocket” and potentially threatening altcoin performance. Kevin believes that if BTC reasserts its advantage above these critical levels of dominance, the near-term prospects for most altcoins – including Dogecoin – could remain circumscribed, even if their individual charts look constructive.

Another factor causing turmoil in the cryptocurrency market is the recent introduction of memecoin by future US president Donald Trump. Kevin lamented that he felt the cryptocurrency market was the “healthiest” it had been in four years – highlighting how higher quality utility coins were gaining popularity and how investors seemed to be “fleeing to quality left and right.”

But he claims that “within just 36 hours” people close to Trump released Memecoin, which derailed this momentum, sparking renewed speculation about memes and causing a double-digit decline in many solid projects. Despite describing the madness as a “temporary derailment”, Kevin believes the situation will eventually stabilize: “It may take a few weeks, but I still think we’re in a very good place.”

In the case of Dogecoin, the immediate sign to watch is whether it can continue to hold above the retested channel line. A robust rebound above the $0.40-$0.41 area could reinforce the uptrend, especially if broader market conditions remain supportive. On the other hand, any escalate in Bitcoin’s dominance – and a possible return of heightened meme mania – could trigger up-to-date difficulties.

At the time of publication, DOGE was trading at $0.38.

Featured image created with DALLE, chart from TradingView.com