Throughout August, Dogecoin traded within a relatively narrow range, leaving both investors and short-term traders underwhelmed. Since the start of September, however, price action has shifted notably. Dogecoin has now met all the conditions of a potential entry setup, creating the possibility for traders to target significant gains of more than 200%.

Dogecoin technical analysis

DOGEUSD - 1 Day Time Frame

From a technical perspective, Dogecoin is currently in an important position. Since the beginning of the year, the token has been trading at nearly a 40% discount. It is important to note, however, that entering during a correction without a clearly defined setup could be extremely risky. Prices that have already fallen may continue to decline further, which can resemble catching a falling knife.

This is why distinguishing between the analytical and execution aspects of a trading framework is critical. At present, within Dogecoin’s structure, the entry setup appears complete. Specifically, it consists of an initial sweep of Sell-Side Liquidity, followed by a daily close above the most recent resistance zone, which previously represented bearish price delivery.

Once the price closed above this zone on the daily chart (highlighted in orange on the attached graphic), it signaled the completion of a potential buy setup. A Stop Loss could be considered below the internal low, as marked on the chart.

Dogecoin price target

On the upside, position targets are situated at several Buy-Side Liquidity levels, along with the psychological level of $3.50. It is important to stress, however, that if a daily candle closes back below the newly formed support zone (around $0.21886), traders could be advised to treat this as a warning signal.

Under ideal circumstances, this support zone might remain intact, but if it fails, the bullish scenario could weaken.