- Dogecoin price sees bulls and bears battle for supremacy.
- Early signs of a bullish takeover are now present.
- A breakout could be imminent.
Dogecoin price has been on a wild ride over the past few weeks. After gaining more than 50% between January 11 and January 15, DOGE dropped a further 44% to print new nine-month lows. However, there are strong indications that a strong reversal may soon be at play.
Dogecoin price positioned for an explosive return to $0.25, short-sellers likely to get squeezed
Dogecoin price action is developing a solid reversal candlestick on the weekly chart, almost right inside the apex of the falling wedge pattern it has struggled to move above. The Dragonfly Doji candlestick developing on Dogecoin’s chart can be observed across multiple altcoin pairs, indicating a broad altcoin market reversal is developing. The oscillators support a bullish outbreak if one occurs.
The most critical oscillator condition for Dogecoin price, at present, is the Composite Index. The Composite Index is in very neutral conditions after trending higher – while DOGE has traded lower. This difference in price and oscillator direction has created regular bullish divergence – a warning that the current downtrend is likely to weaken or terminate. Additionally, the Composite Index has just crossed above its moving averages. Combining the neutral setting and a bullish crossover of two averages is a rare and powerful bullish signal.
Dogecoin price needs a weekly close above the falling wedge pattern and the Tenkan-Sen to mitigate the current bearish state. A weekly candlestick close at $0.175 would fulfill both of those criteria. However, Dogecoin price remains extremely bearish with the Ichimoku system. Therefore, as long as the current close is below the Tenkan-Sen and Kijun-Sen while the Chikou Span is below the bodies of the candlesticks and in open space, DOGE has a wide-open range to continue moving lower.
DOGE/USDT Weekly Ichimoku Kinko Hyo Chart
A weekly close below the falling wedge at $0.132 would invalidate any near-term bullish outlook.