Dogecoin’s price, unlike a lot of altcoins, seems to be holding above its support levels despite the nasty market crash since 5 May. The crash pushed DOGE inside its bullish setup, where it awaits a breakout.
Dogecoin price needs reevaluation
Dogecoin price describes a falling wedge pattern and has been doing so since its all-time high in May. This pattern formed as DOGE crashed 85% from a peak of $0.740 in May. This move to the south formed a base at around $0.109 and showed promise of a trend reversal.
During this journey to the downside, the Dogecoin price set up three distinctive lower highs and lower lows which when connected using trend lines reveal a falling wedge pattern.
This technical formation forecasts a 68% upswing to $0.241, determined by adding the distance between the first swing high and swing low to the breakout point.
Although DOGE breached the wedge’s upper trend line on 25 April, it failed to sustain the momentum, leading to a reversal. Since this fakeout, the Dogecoin price has had many opportunities to break through but has failed every time.
The recent crash in Bitcoin price affected DOGE but in slightly less capacity relative to other altcoins. Dogecoin’s price crashed 20% and came close to retesting the lower trend line of the falling wedge. Despite this downtrend, the recovery has been amazing; so far, the dog-themed crypto has rallied 15% and shows no signs of stopping.
Assuming the crash continues, DOGE could retest the immediate support level at $0.087. Here, a bounce in buying pressure or prior to this level could trigger an uptrend that breaks out of the falling wedge.
The resulting rally will propel the Dogecoin price by 68% to its forecasted target of $0.241.
While the technicals are on the fence and show no clear directional bias, the social volume puts things into perspective. This metric tracks the mentions of DOGE on the internet and can be used to time the tops and bottoms of the rally if used correctly.
Since 26 April, the social volume has dropped from 9,122 to 1,589, denoting an 82% slump. This trend suggests that investors are not interested in DOGE and are likely pulling their capital out, which paints a bearish picture.
Source: Santiment