Meme Coins Rally Begins: Dogecoin, Shiba Inu, Pepe regain momentum as risk-on sentiment thrives

Meme coins market capitalization surged over 6% on Tuesday, surpassing $62 billion. Dogecoin (DOGE) and Shiba Inu (SHIB) recorded a rise of over 5% on Monday, while Pepe (PEPE) experienced a jump of over 8%. The technical outlook for DOGE and SHIB signals a potential breakout rally in the short term, while PEPE prepares for a trend reversal. 

Dogecoin outgrows bearish channel, eyes $0.20 breakout

DOGE crosses above the resistance trendline formed by the peaks on May 23, May 29, and June 8 on the 4-hour price chart shared below. This marks the breakout of a falling channel, the price action formed a parallel support trendline with lows on May 20, May 31, and June 5. 

At the time of writing, Dogecoin edges lower by under 1% on Tuesday, projecting a brief breather phase in motion. Suppose the meme coin closes above the highest weekly close at $0.1975 on the 4-hour chart. Investors could consider it a buying opportunity with the next immediate resistance at $0.2145. 

The Moving Average Convergence/Divergence (MACD) indicator and its signal lines cross above the zero line, signaling a trend reversal. 

SHIB/USDT 4-hour price chart. Source: Tradingview

Conversely, a reversal from the $0.1975 could result in a corrective trend to the broken trendline near $0.1822. Investors could find a selling opportunity if DOGE closes below $0.1822, with the support floor at $0.1642, last tested on May 6. 

Shiba Inu marks a wedge pattern breakout

Shiba Inu drops marginally over 1% at press time on Tuesday after a sudden 5% jump on the day before. Similar to DOGE, the Ethereum-based meme coin breaks out of a local resistance trendline in the 4-hour chart, as shared below. 

Despite a bounce off the $0.00001230 support floor, highlighted by the late May reversal, SHIB struggles to surpass the weekly high in the 4-hour chart at $0.00001329. A clean push above this resistance could propel SHIB towards the $0.00001393 level, which acted as a crucial support floor last month.  

The MACD indicator surges above the zero line alongside its signal lines, projecting a high likelihood of trend reversal. 

SHIB/USDT 4-hour price chart. Source: Tradingview

Conversely, a flip below $0.00001230 support could extend the declining trend to $0.00001029, the lowest price in April. 

Pepe trend reversal shows massive upside potential

Pepe leads the gains among top meme coins with a surge of over 8% on Monday, printing its fourth consecutive bullish candle. The frog-themed Ethereum-based meme coin holds ground above the $0.000010 psychological support and marks the highest closing price in the last week, a complete recovery from the flash crash on Thursday. 

At the time of writing, PEPE trades at $0.00001253 under the 50% Fibonacci level at $0.00001681, retraced from the all-time high at $0.00002836 to the year-to-date low at $0.00000525. 

Investors with purchase costs below the 50% Fibonacci level are likely to boost buying pressure, as seen in early May, to reach the halfway mark as a profit booking spot. Thus, the meme coin recovery shows upside potential of over 30%. 

The MACD indicator is on the verge of signalling a buy signal with the blue line ready to cross above the red line. A crossover aligned with the resurgence of bullish histograms from the zero line could signal a trend reversal. 

PEPE/USDT daily price chart. Source: Tradingview

Conversely, failing to maintain momentum above the $0.000010 psychological level will nullify the short-term bullish outlook. In such a case, a closing below the support level could extend the downfall to $0.00000758, last tested on May 6.