A brutal correction seen in the Dogecoin (DOGE) market between May 2021 and February 2022, which saw the price fall by almost 85%, seems to have stopped this month.
DOGE/USD Rebounds 30% in Two Weeks
DOGE saw a significant “buyback” when its price crashed to levels around $0.10 two weeks ago, prompting a move of 30% up to $0.14 by March 27th. In the meantime, The coin’s bullish pullback emerged from a support level depicting a “falling wedge” configuration, suggesting an extended bullish reversal in future weekly sessions.
In detail, A falling wedge pattern occurs when price is trending down while oscillating between two descending and converging trend lines. In a perfect scenario, the setup will cause the price to break out of the downtrend range and rally up by the maximum distance between the upper and lower trendlines of the wedge.
DOGE’s bounce off the wedge’s lower trendline two weeks ago opens its chances to continue the move higher towards the upper trendline near $0.18. Therefore, the break above the upper trendline further unleashes the Dogecoin price rally towards $0.37, more than 150% from the current price.
Veteran investor Tom Bulkowski believes A falling wedge performs poorly when it comes to predicting bullish chart patternsand notes that his “breakeven point is high and the average price is low.” He cites a study of 800 trades showing this The probability of a falling wedge breakout hitting its upside target is almost 62%.
Likewise, Dogecoin’s track record of demonstrating a period of very positive correlation with Bitcoin (BTC) – at 0.94 against the perfect score of 1 on March 27th – could also limit its bullish bias if the latter falls due to ongoing macroeconomic and geopolitical pressures.
Mice McGlone, Senior Commodity Strategist at Bloomberg Intelligence, noted that Bitcoin’s price could fall to $30,000 due to its strong correlation with the US stock market. Nonetheless, he claimed that the price of BTC should recover from its bearish decline and reach $100,000 in the long-term.
DOGE price levels to watch out for
Dogecoin’s recent bounce is now suggesting a quick recovery towards the $0.15 zonea range that includes three levels of psychological resistance: the 20-day exponential moving average (20-day EMA; the green wave), the 50-day EMA (the red wave), and the 0.618 Fib line ( near $0.19) from the Fibonacci retracement chart, all shown in the chart below.
A strong pullback, accompanied by increasing volume, from such a resistance zone could see DOGE test the 0.786 Fib line near $0.10Â as a preliminary bearish target. The opposite, A decisive move above the range could result in a sustained move higher towards $0.24, with views of $0.30 and $0.37Â (also the target of the falling wedge).
The opposite, A decisive move above the range could result in sustained bullish momentum towards $0.24targeting $0.30 and $0.37 (also the target for the falling wedge).
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