The Dogecoin (DOGE) market that witnessed a brutal correction between May 2021 and February 2022 saw a price drop of around 85% that seems to have stalled this month.
DOGE/USD returns 30% in two weeks
DOGE experienced a strong decline two weeks ago when its price dropped to the level of around $0.10, which resulted in a 30% rally to $0.14 by March 27. Meanwhile, the coin’s reverse retracement occurred at a support level which constitutes a “falling wedge”. The setup indicates an extended bullish reversal in the coming weekly sessions.
By extension, a falling wedge pattern occurs when the price moves lower, converging the trendline, while fluctuating between two downward slopes. In an ideal scenario, the setup would result in price breaking above the descending range, rising to the maximum distance between the upper and lower trendlines of the wedge.
DOGE’s rebound from the lower trendline of the wedge two weeks ago opens up possibilities for a continuation of the move towards the upper trendline – near $0.18. Therefore, breaking the upper trendline propelled Dogecoin price to $0.37, which is more than 150% higher than today’s price.
DOGE RISK
Veteran investor Tom Bulkowski views a falling wedge as “poor performance” when it comes to predicting bullish chart patterns, noting that his “breakeven failure is high and average price low.” He cites a study of 800 trades which shows that the probability of a falling wedge breakout meeting its bullish target is close to 62%.
In addition, Dogecoin’s record of showing a period of highly positive correlation with bitcoin (BTC) – at 0.94 against a corrected score of 1 on March 27 – declined afterward due to ongoing macroeconomic and geopolitical pressures on its bullish bias. may also limit. ,
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Mice McGlone, senior commodity strategist at Bloomberg Intelligence, said bitcoin could drop to $30,000 due to its strong correlation with the US stock market. Still, he added that the BTC price must recover from its bearish bearish pullback to target $100,000 in the long term.
DOGE Price Levels to Look Forward to
Dogecoin’s latest rally is now bullish towards the $0.15-0.19 area, a range encompassing three psychological resistance levels: 20-days EMA (20-days EMA; green wave), 50-days EMA (red wave), and the 0.618 Fibonacci line (near $0.19) of the Fibonacci retracement graph – all shown in the chart below.
A strong pullback along with increase in volume from the said resistance area could result in DOGE testing the 0.786 Fibonacci line near $0.10 as its interim downside target. Conversely, a decisive move above the range could result in an extended upside momentum towards $0.24, with an eye on $0.30 and $0.37 (also falling wedge targets).
Conversely, a decisive move above the range could result in an extended upside momentum towards $0.24, with an eye on $0.30 and $0.37 (also descending wedge targets).
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