Dogecoin Price Could Experience a 96% Rally If It Breaks Out of This Falling Wedge Pattern

Dogecoin has been on a downward trend for the past 30 days, marked by a pattern of lower highs and lower lows. However, a new analysis suggests that it may be on the verge of a significant price reversal, forming a falling wedge pattern which could lead to a potential rally of 96% if buying pressure increases.

Key Takeaways

Dogecoin has been declining for the last month, hitting lower highs and lows.
A falling wedge pattern has formed in its price action, hinting that a reversal might be on the horizon.
If Dogecoin breaks out above the wedge's upper boundary, it could see a rally of up to 96%.
The success of this breakout depends on strong buying momentum and increasing trading volume.

Dogecoin

Understanding the Falling Wedge Pattern

In recent analysis, crypto commentator Clifton Fx has highlighted that Dogecoin’s price action on the 12-hour chart exhibits a falling wedge pattern. This pattern consists of two downward-sloping trendlines that are converging, indicating a gradual tightening of price action. Each bounce within this setup is becoming smaller, suggesting a loss of control by sellers and a potential buildup of buying pressure.

Clifton Fx pointed out that Dogecoin is nearing the upper boundary of this wedge. The chart accompanying his post shows the cryptocurrency making several attempts to break through this level, a sign often interpreted as an early indicator that market momentum is changing.

Dogecoin Chart
Source: Chart from Clifton Fx on X

Over the last 48 hours, Dogecoin has experienced a series of green 12-hour candles after bouncing back from a low of $0.135. This movement has brought the price closer to the upper resistance trendline of the wedge. According to the analysis, what happens at this boundary will be crucial in determining Dogecoin's next steps. A strong breakout above the wedge would confirm the pattern’s completion, indicating that Dogecoin may be prepared for a significant upward movement.

The Potential for a 96% Rally

The attractiveness of this technical setup lies in the significant price increase it could facilitate following a breakout. The vertical height of the wedge serves as a guide for anticipating the potential rally. If Dogecoin manages to break out successfully, analysts estimate it could climb by as much as 96% from its current price levels.

However, it’s important to note that this potential price movement does not guarantee immediate success. Dogecoin has faced selling pressure for several weeks, and a breakout lacking sufficient momentum might falter. A robust surge above the trendline, particularly accompanied by rising trading volume, would provide a strong confirmation that buyers are stepping in.

Conversely, a slower or weaker attempt at breaking through the resistance trendline could result in Dogecoin retreating toward the lower support trendline, situated around the mid-$0.13 range.

Dogecoin Trading Chart
DOGE trading at $0.15 on the Daily chart | Source: DOGEUSDT on Tradingview.com