Dogecoin (DOGE)Despite its recent rally, it seems to be struggling to break an important and popular bullish pattern on the weekly chart. Despite its significant rise, DOGE has to overcome this critical hurdle to achieve its desired goals.
Dogecoin Can Offer Great Opportunities
Dogecoin price, dropped from an all-time high of $0.740 to $0.109 in less than a year, causing the unit price to drop 85%. Although this big drop was simultaneous with the decreases in the crypto market, DOGE did not follow this trend from time to time.
However, this correction produced three distinct lower highs and lower lows that, when combined using trendlines, define a falling wedge pattern.
The technical formation shows that the $0.235 level is possible, with a 68% increase determined by adding the distance between the initial high and low swing point to the breakout point.
A reading on the daily price chart revealed that an uptrend was discovered on April 26 at an average of $0.139, but has not yet confirmed it on the weekly chart. If this happens, the uptrend will really have started.
Dogecoin will wait for a secondary confirmation after turning the $0.159 hurdle into a support. In such a case, traders can accumulate DOGE and use the wave that retests the forecast target at $0.235.
meme coin For this bullish outlook, the 365-day market cap to realized value model (MVRV) will also be important. This model is used to measure the average profit/loss status of investors who have purchased DOGE over the past year.
A value between -10% and -15% indicates that short-term holders are making a loss. Interestingly, long-term holders tend to accumulate and form local bottoms under these conditions. For this reason, this range is called the “zone of opportunity”.
For DOGE, the 365-day MVRV is hovering around -38%, suggesting that there is a chance for a trend reversal and is in line with the technical outlook.
Regardless of the rise in Dogecoin price, any current technical outlook could disappear instantly as a sharp drop in Bitcoin would trigger a dip in the crypto markets. Under these circumstances, if Dogecoin price shows a weekly candlestick below $0.078, the bullish thesis will be invalidated, potentially pushing DOGE as low as $0.048.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.