Dogecoin price recovers quickly from 10% drop in previous day

Dogecoin (DOGE) got caught on the wrong side of the fence yesterday with a nosedive correction of 10% that tested the red descending trend line from August 16. With that test, the bulls jumped in to use the bounce-off as an entry point which sees a higher opening today. If bulls play this right and more investors already join the price action, expect a possible bullish rally towards the 55-day Simple Moving Average (SMA), holding 20% of gains.

Dogecoin could rally 20% going into New Year

Dogecoin was on the wrong side of the market yesterday as price action collapsed under bearish pressure as bulls refrained from making new highs and reclaiming the $0.19 marker. The fade resulted in a 10% devaluation back towards $0.17. With the bounce off the red trend line, expect a possible bullish reversal today that could squeeze bears out of their position and make the downturn short-lived.

DOGE price would see more investors jump on the entry and push the price back to $0.19 with a possible initial test to break $0.20 again. Expect, unfortunately, to already see some profit-taking again as some investors will be afraid of again a rejection and strong fade. As global tailwinds seem persistent since the Christmas rally, expect this to be the additional catalyst that could bring DOGE price towards $0.21, with the 55-day SMA as a cap in the near term.

DOGE/USD daily chart

The bullish rally thus drives on the tailwinds coming from global markets and could see another push against the red descending trend line if those tailwinds start to fade. Expect then bears to enter below the red descending trend line and make a test at $0.16 with both a historical level and the S10 monthly support coming in. Depending on global sentiment, a break towards $0.14 would not be impossible, but would not be persistent either.