Will Dogecoin’s (DOGE) Bullish Pattern Lead to a Reversal?
The Dogecoin (DOGE) price has fallen since December 11, 2023, culminating with a new low today.
Despite the decrease, the Dogecoin price has created a short-term bullish pattern. Will this lead to a reversal?
Dogecoin Bounces After Sharp Decrease
The technical analysis from the daily time frame shows that the DOGE price broke out from an ascending parallel channel on November 6, 2023. The breakout led to a high of $0.108 on December 11.
The DOGE price has fallen since, culminating with a low of $0.074 today. The low was important since it created a lower wick (green icon), validating the 0.618 Fib retracement support level and the resistance trend line of the ascending channel.
Despite the bounce, the daily Relative Strength Index (RSI) shows no positive signs. Market traders use the RSI as a momentum indicator to identify overbought or oversold conditions and to decide whether to accumulate or sell an asset.
Readings above 50 and an upward trend indicate that bulls still have an advantage, whereas readings below 50 suggest the opposite.
The daily RSI is falling and is below 50.
Read More: How to Buy Dogecoin (DOGE)
DOGE Price Prediction: Will Bounce Mark the Local Bottom?
The six-hour time frame shows bullish signs that suggest the DOGE price will initiate a significant bounce. This is because of the price action and the RSI readings.
The six-hour RSI shows a significant bullish divergence (green) that often precedes upward movements.
The Dogecoin price action also shows a double bottom, which is considered a bullish pattern. The fact that the pattern was combined with long lower wicks further supports its legitimacy.
Read More: Dogecoin – Should You Buy into the Hype?
If the double bottom and the bullish divergence materialize, the DOGE price can increase by 13% and reach the descending resistance trend line at $0.089
Despite this bullish DOGE price prediction, a decrease below today’s low of $0.074 will invalidate the double bottom. Then, DOGE could fall by 15% to the next closest support at $0.067.
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