Dogecoin Eyes an Inverse Head and Shoulders: A $0.15 Break Could Trigger Action

Dogecoin (DOGE) is showing signs of potential growth as it forms an inverse head-and-shoulders pattern on the daily chart. According to analysis by Cantonese Cat, DOGE is currently positioned just below a key resistance area while simultaneously resting above a significant demand zone.

Key Takeaways

Dogecoin may form an inverse head-and-shoulders pattern, indicating a bullish potential.
A breakout above the $0.149–$0.152 resistance could propel DOGE to target around $0.186.
The Bollinger Bands on the 2-day chart suggest bullish momentum if the price maintains above $0.1343.
Immediate resistance is observed near $0.152, which DOGE must surpass to validate the bullish trend.
Current trading price stands at approximately $0.139.

Dogecoin price news

Dogecoin Set to Breakout Towards $0.19

On January 16, an analysis shared on X by Cantonese Cat outlines an inverse head-and-shoulders pattern for DOGE/USD on the daily chart. This pattern includes a left shoulder forming in early December, a deeper head developing by late December around the mid-$0.11 range, and a right shoulder as prices declined after an earlier spike in January.

Dogecoin daily chart

The key observation from the daily chart is a "Buy order block" indicated between approximately $0.1250 and $0.1350. The price appears to be retracing towards the top of this block following a recent surge that didn't sustain. This position suggests that DOGE is in a typical "right shoulder" area while the pattern establishes itself.

Above the current price, a horizontal resistance band—highlighted in grey—exists between $0.149 and $0.152. For the inverse head-and-shoulders theory to shift from "forming" to "triggering," DOGE must reclaim this area, as it has historically represented resistance during recent attempts.

From the inverse head-and-shoulders pattern identified by Cantonese Cat, the projected movement is determined by measuring the height between the neckline and the head low, then extending that upward from the neckline. The neckline is marked near the grey supply band at about $0.151, with the head situated around $0.116. This gives a height of approximately $0.035, indicating a price target near $0.186.

Importantly, this target coincides with a significant red supply zone that starts at around $0.175 and stretches towards $0.19, marking the first notable resistance level where a confirmed breakout could face pushback.

Momentum Signals from DOGE’s 2-Day Bollinger Bands

The Bollinger Bands on the 2-day chart lend support to the optimistic outlook for DOGE. On Tuesday, Cantonese Cat pointed out that DOGE is trading above the Bollinger basis located around $0.1343, with the upper band at approximately $0.1526 and the lower band near $0.1160.

Dogecoin 2-day chart

Cantonese Cat summarized the situation concisely: “Price wanting to hang out at the top part of the Bollinger band? We have a chance here?” The importance of being at the top part of the band indicates potential momentum. Following a prolonged decline, consistent closes above the basis and into the upper section of the bands signal that sellers may lose control over the price action, even before surpassing apparent horizontal resistances.

However, the 2-day perspective reveals an immediate challenge: the upper band aligns closely with the daily resistance area. Thus, the bullish strategy involves not only maintaining support but also demonstrating strength by accepting prices above the $0.15 to $0.152 zone.

If DOGE can defend the $0.1250 to $0.1350 buy-side block and secure a comeback above the $0.149 to $0.152 supply band, the theoretic inverse head-and-shoulders pattern becomes more credible. The next supply zones indicated on the chart are near $0.175 and the upper-$0.18 area, where previous selling activity has been noted.

Conversely, should the price fall below the buy order block, the validity of the pattern would erode significantly. In that scenario, the 2-day Bollinger Bands would likely redirect focus toward the lower band level around $0.1160, as well as the December lows.

Currently, DOGE is trading at approximately $0.139.

Dogecoin price chart

The analysis indicates that DOGE must break through the 200-week EMA, as seen in the 1-week chart.

Source: DOGEUSDT on TradingView.com