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The Dogecoin (DOGE) price broke out from a long-term descending wedge and then created a short-term double-bottom pattern.
While the increase is expected to continue in the short term, the direction of the long-term trend is still unclear.
Dogecoin Price Creates Bullish Pattern
The technical analysis from the daily time frame shows that the DOGE price broke out from a descending wedge on May 16. The wedge is considered a bullish pattern, meaning that it leads to breakouts most of the time.
However, the price failed to sustain the increase after the breakout. Rather, it returned to its pre-breakout level.
Despite this seemingly bearish movement, DOGE created a double bottom pattern combined with long lower wicks (green icons). Similarly to the wedge, the double bottom is considered a bullish pattern.
Additionally, the wicks are considered a sign of buying pressure, since sellers were not able to push the price down. Rather, buyers took over and caused the price to close higher.
DOGE Price Prediction: How Long Will Bounce Continue?
A closer look at the daily time frame gives a bullish DOGE price prediction. The main reasons for this are the wave count and the RSI readings.
The wave count shows a completed five-wave downward movement (white) inside the wedge. Since the movement is complete, a retracement is likely.
If one occurs, the closest resistance will be between $0.087 and $0.091, created by the 0.5-0.618 Fib retracement resistance levels.
The theory of Fibonacci retracement levels suggests that after a substantial price move in one direction, the price will partially retrace or return to a prior price level before continuing in its original direction. This principle can be used to determine the peak of potential future upward movements.
Despite this bullish short-term price prediction, a drop below the wave 5 low at $0.069 (red line) will mean that the trend is still bearish. In that case, the DOGE price could fall to $0.050.
For BeInCrypto’s latest crypto market analysis, click here.
Disclaimer
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.
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