Jonathan Morgan
Independent Analyst
- Dogecoin price maintains support and resistance inside the falling wedge.
- From a probability perspective, the most likely outcome from this pattern is a bullish breakout.
- Downside risks remain, and they are substantial.
Dogecoin price has stubbornly and persistently remained inside the bounds of a falling wedge. Except for a false breakout higher and a false breakout lower in the middle of the month, DOGE has been confined to the trendlines of this bullish reversal pattern.
Dogecoin price action awaits confirmation of a breakout – directional bias is bullish
Dogecoin price is just two days away from reaching the apex of a falling wedge pattern – a pattern confirmed in December 2021. The falling wedge pattern is one of the most potent bullish reversal patterns in Technical Analysis and is heavily slanted towards prices moving higher.
According to Technical Analysis – The Complete Resource for Financial Market Technicians (Kirkpatrick & Dahlquist, 2016), the falling wedge (and rising wedge) is one of the most profitable patterns of all – the publisher highlights a specific point made in the text to reinforce the point and strength of this pattern.
The falling wedge has a requirement that the trendlines of the pattern are touched at least five times – Dogecoin price has done this. A characteristic but not necessarily a rule is that volume declines in the final third of the wedge pattern. Again, Dogecoin price has had a precipitous drop in volume, especially near the apex of the trendlines. For upwards breakouts, failure rates are historically low (8% - 11%).
Volume that increases post-breakout increases this pattern's performance and profitability rate. Conversely, pullbacks and throwbacks are extremely common and harm subsequent performance.
A conservative breakout target for Dogecoin price is the top of the daily Ichimoku Cloud at $0.19, positioning the close above the Tenkan-Sen, Kijun-Sen, and Senkou Span A.
DOGE/USDT Daily Ichimoku Kinko Hyo Chart
However, downside risks remain. The Volume Profile remains precipitously thin between $0.09 and $0.16. Any time spent below the $0.16 value area continues to put Dogecoin price at high risk of a flash-crash into the $0.09 price range.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
Shiba Inu price stagnancy brings investors’ losses to a 28-month high
Shiba Inu has been rather dormant these past four weeks, which is bearing a negative impact on the investors. The meme coin market has been struggling to make headlines as the lack of increase in altcoin’s market value has left investors in peril, which is now driving them to pull back and wait until SHIB starts rising again.
LDO sees lowest cumulative volume in ten months as Lido DAO price struggles to breach key barrier
Lido DAO price is up over the past day as the market shifted its stance despite the SEC announcing a delay in the spot Bitcoin ETF applications of BlackRock among other applicants. However, this one-day rise is not enough for the likes of LDO that have been failing in recovering for a few weeks now.
THORChain leaps 12% with soaring open interest as RUNE targets a peak of its current range
THORChain is testing a crucial multi-month obstacle after a remarkable climb. The move has completed the altcoin’s recovery rally following the 15% fall of September 27. RUNE has outperformed the broader market, with Bitcoin and Ethereum recording only up to 3% in daily gains.
Chainlink and Australia’s ANZ Bank issue AUD-stablecoin to successfully test interoperability
Chainlink put itself on the map with the help of its real-time data-feeding Oracles and is now in the spotlight for its interoperability protocol. Through this protocol, the blockchain project intends to not only connect two or five chains but also create the world’s largest liquidity layer, starting with Australia’s second-largest bank.
Bitcoin: BTC recovery rally could be bull trap in disguise, here’s why
Bitcoin (BTC) price remains unfazed even after the multiple spot BTC ETF delays from the US Securities & Exchange Commission (SEC). But investors need to be careful with the ongoing BTC rally as it could be a trap for early bulls.