Dogecoin Experiences Significant Decline: Is a Rebound on the Horizon?
Dogecoin has recently faced a significant downturn, experiencing a decrease of 11.8% in the past 24 hours and a staggering 20% over the last week. With these losses, Dogecoin might soon retest its support at the $0.30 price level. However, amidst the market volatility, Trader Tardigrade, a prominent technical analyst on the social media platform X, has identified a potential symmetrical triangle pattern forming on the daily candlestick chart of DOGE. This classic technical formation often signals upcoming major price movements, suggesting that a breakout could reignite an upward trend.
Potential Symmetrical Triangle Pattern in Dogecoin
According to insights by Trader Tardigrade, Dogecoin appears to be trading within a symmetrical triangle over the past week. This pattern emerged following a price correction that began after DOGE reached $0.43 on January 18.
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The daily candlestick chart reveals that since January 20, most candlestick bodies have remained within the boundaries of this triangle. Initially, during the first two days of the pattern’s formation, there were instances where wicks briefly surpassed the upper trendline, but the price swiftly retreated back into the triangle. Since then, Dogecoin has exhibited a series of lower daily highs and higher daily lows, suggesting diminishing selling pressure and a balance between buyers and sellers.
Potential for a Bullish Breakout
The price movement has advanced towards the apex of the triangle, and according to Trader Tardigrade, a breakout could favor the bulls, potentially driving the price significantly higher.
Impact of a Breakout on Dogecoin’s Price
If Dogecoin successfully breaks above the upper trendline of the symmetrical triangle, it could mark the resumption of a bullish trend. Trader Tardigrade estimates that this breakout might propel Dogecoin to a price target of at least $0.45.
However, instead of an upward trajectory, Dogecoin has recently broken below the lower trendline of the symmetrical triangle, redirecting its path downwards towards support at $0.31. This level has been a critical liquidity zone for the past 30 days, serving as a reliable support point, with Dogecoin rebounding from this price three times in recent declines. The most noteworthy recovery occurred on January 13, when Dogecoin bounced off the $0.31 level, subsequently soaring to a high of $0.4318.
Will Dogecoin Rebound at $0.31?
The question now is whether DOGE can emulate this pattern by rebounding once again at the $0.31 mark. A successful rebound at this crucial support level would indicate a strong defense by buyers, potentially empowering Dogecoin to resume its upward momentum. Should the rebound gather enough steam, it could restore confidence in DOGE’s bullish prospects and set the stage for another attempt at reaching the $0.45 target. Until then, $0.31 remains a pivotal level to monitor as the meme coin tests the fortitude of its buyers.
As Dogecoin navigates these turbulent market conditions, traders and investors alike are keenly observing these critical price levels and patterns. The coming days will be crucial in determining whether Dogecoin can regain its footing and embark on a renewed upward trajectory.
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