A brutal correction in Dogecoin (DOGE) market between May 2021 and February 2022, in which the price fell by almost 85%, seems to have come to a standstill this month.
DOGE/USD Rebounds 30% in Two Weeks
experience DOGE strong dip buy when its price crashed to levels around $0.10 two weeks ago, leading to a 30% recovery move to $0.14 by March 27th. Meanwhile, the coin’s bullish retracement formed at a support level that represents a “falling wedge” setup, signaling an extended bullish reversal in the weekly sessions ahead.
In detail, a falling wedge pattern occurs when price trends decline while oscillating between two downward-sloping, converging trendlines. In a perfect scenario, the setup will cause the price to break out of the descending range and rise by 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 its possibilities to continue the upward movement towards the upper trendline near $0.18. Thus, a break above the upper trendline will further reveal Dogecoin’s price surge towards $0.37, up more than 150% from today’s price.
Experienced investor Tom Bulkowski sees a falling wedge as a “poor performer” when it comes to predicting bullish chart patterns, noting that their “breakeven failure is high and average price is low.” He cites a study of 800 trades showing that the probability of a falling wedge breakout hitting its bullish target is almost 62%.
Additionally, Dogecoin’s track record of demonstrating a period of highly positive correlation with Bitcoin (BTC) – at 0.94 versus the perfect level of 1 on March 27 – could also limit its bullish bias if the latter is weakened due to the ongoing macroeconomic and geopolitical pressure falls.
Mice McGlone, Senior Commodity Strategist at Bloomberg Intelligence, written down that Bitcoin could fall as low as $30,000 due to its strong correlation with the US stock market. Nonetheless, he claimed that BTC’s price should recover from its bearish slump and target $100,000 in the long-term.
Next, keep an eye on the DOGE price levels
Dogecoin’s recent rebound move now targets a quick start towards the $0.15-0.19 area, a range that includes three psychological resistance levels: the 20-day exponential moving average (20-day EMA; the green wave), the 50-day EMA (the red wave) and the 0.618 Fib line (near $0.19) of the Fibonacci retracement chart – all shown in the chart below.
A strong pullback accompanied by an increase in volume from the mentioned resistance area could see DOGE test the 0.786 Fib line near $0.10 as a preliminary downside target. Conversely, a decisive move above the range could result in extended upside momentum towards $0.24 with an eye toward $0.30 and $0.37 (also the falling wedge target).
Conversely, a decisive move above the range could result in extended upside momentum towards $0.24 with an eye toward $0.30 and $0.37 (also the falling wedge target).
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.
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