Dogecoin (DOGE) looks set to extend its rebound move despite the current cryptocurrency bear market.
There is a 79% chance that DOGE will extend his bounce move
DOGE price appears to have been painting a “bump-and-run-reversal (BARR) bottom” since May 11, a technical pattern pointing to extended trend reversals in a bear market. It consists of three successful phases: Entry, Bounce (Bump), and Run (Run).
In the “entry phase”, the price consolidates within a narrow and sideways rangeshowing an intermediate trend conflict among investors.
Next, the “bounce phase” occurs, in which the price drops and recovers sharply, leading to a price breakout, defined by the “run phase”.
Dogecoin seems to be in the rebound phasewhile looking for a break above the descending trendline resistance of the BARR bottom. Suppose DOGE breaks above said price cap. So, as a technical analysis rule of thumb, you could see a run to the origin level of BARR.
That puts the DOGE price on track at $0.0941, up more than 20% from the current price. Notably, the upside target also coincides with the token’s 50-week exponential moving average. (50-week EMA; the blue line on the chart below).
The BARR fund has reached its profit target 79% of the time, according to a report by veteran investor Thomas Bulkowski. Curiously, the breakout stage of the pattern usually produces an average 55% rally, which means that the potential for DOGE to reach $0.123 is still there.
Is DOGE price bottoming out?
Dogecoin rally to $0.0941 might not break out of its downtrend due to a number of technical and fundamental factors.
From a technical point of view, the price of DOGE is at risk of falling into a “bull trap”, since its trend is bullish (it has already risen almost 60% in the last nine days). In particular, The coin’s bearish bias arises due to a “rising wedge” pattern on its lower time frame charts.
In detail, DOGE has been in an uptrend within a range defined by two rising and contracting trend lines, thus forming a rising wedge.
Usually, this technical setup leads to a bearish reversal, confirmed when the price breaks below the trend line of the wedge.
By doing so, the price could fall to the maximum distance between the upper and lower trend line of the wedge.
The possible breakout points of the DOGE rising wedge are in the range of $0.07 to $0.08. Therefore, the token could fall towards the $0.05-0.06 zone if the wedge breakout turns out as intended, down 15%-25% from current price levels.
Fundamentals, including Federal Reserve rate hikes and a $9 trillion balance sheet reduction, support bearish technical outlooks in the short to medium term.
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