• Dogecoin price drops for six consecutive gains.
  • Bears wipe out nearly all of the 50% gains generated from January 11.
  • A successful retest of the falling wedge will likely generate a new uptrend.

Dogecoin price action has been an absolute joy for short-sellers – but that joy may turn bitter very soon. Dogecoin broke out of the rising wedge pattern on January 13 and is just now retesting that trendline breakout.

Dogecoin price shows resiliency among crypto wide rout

Dogecoin price experienced a strong bounce and rally off of the weekly lows and the upper trendline of the falling wedge pattern. At the same time, DOGE could be developing the beginning of the right shoulder of an inverse head-and-shoulders pattern, signaling a bullish reversal in the future.

Another reason for a bullish outlook in the immediate future is the presence of a Tower Pattern on the Point and Figure chart. However, tower patterns are rare and only form when two columns develop an equal number of boxes in each column; ten or more is the requirement. The entry on a tower pattern is the three-box reversal.

A hypothetical long entry trade setup is now open for Dogecoin price. The long idea is a buy stop order at $0.17, a stop loss at $0.15, and a profit target at $0.315. The current O-column can move two more boxes lower before the Tower Pattern is invalidated. As DOGE moves lower, the entry and stop follow in tandem, but the profit target at $0.315 remains the same.

The trade idea represents a 7.25:1 reward/risk setup for Dogecoin price. However, targets with such a wide range between the entry and profit target very rarely hit; there are normal pullbacks and whipsaws involved on the way. For that reason, a three-box trailing stop would help protect any implied profit generated post entry.

 


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.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

MANTA suffers 4% pullback after unlocking tokens worth $40 million

MANTA suffers 4% pullback after unlocking tokens worth $40 million

Manta Network (MANTA) unlocked over 8% of its circulating supply on Thursday. The unlocked tokens were airdropped and distributed in public sale, according to data from Tokenunlocks. 

More Cryptocurrencies News

XRP struggles to recover as lingering Ripple lawsuit could reach Supreme Court, former SEC litigator says

XRP struggles to recover as lingering Ripple lawsuit could reach Supreme Court, former SEC litigator says

The SEC vs. Ripple potential showdown at the Supreme Court is likely, says former SEC litigator Ladan Stewart. XRP Ledger calls developers, businesses and investors to build on the blockchain, extending Apex 2024 registration until April 30. 

More Ripple News

Bitcoin Layer 2 Merlin chain TVL climbs 20%, defying broad market correction

Bitcoin Layer 2 Merlin chain TVL climbs 20%, defying broad market correction

Merlin chain’s TVL added 20% this week, and crossed $800 million on Thursday. Bitcoin Layer 2 assets noted double-digit losses in the past week. Stacks, Elastos, SatoshiVM, BVM are hit by a correction as Bitcoin hovers around $61,000. 

More Bitcoin News

If Bitcoin restarts bull run, these altcoins are likely to explode Premium

If Bitcoin restarts bull run, these altcoins are likely to explode

If Bitcoin’s consolidation ends and the bull run resumes, altcoins are likely going to trigger a massive rally. Last cycle’s hot tokens like SOL, AVAX, WIF, ONDO, etc., could see renewed enthusiasm. 

More Cryptocurrencies News

Bitcoin: BTC’s rangebound movement leaves traders confused

Bitcoin: BTC’s rangebound movement leaves traders confused

Bitcoin (BTC) price has been hovering around the $70,000 psychological level for a few weeks, resulting in a rangebound movement. This development could lead to a massive liquidation on either side before a directional move is established. 

Read full analysis

BTC

ETH

XRP