Dogecoin (DOGE) pared some losses against Bitcoin (BTC) on March 10, one day after the DOGE/BTC pair plunged to its lowest level since October 2022. Can DOGE price see a prolonged rally in the future?
On the daily chart, the DOGE/BTC pair reached 331 sats, up 4.75% from the previous day’s low of 316 sats. The bounce occurred around a multi-month downtrend line, which has limited the pair’s downward moves since November 2022.
DOGE price against BTC
Interestingly, the DOGE/BTC descending trend line appears to be part of a prevailing falling wedge pattern. Traditional chart analysts consider the falling wedge to be a bullish reversal setup, particularly due to the trendiness of the pattern. 62% success rate in meeting its upward price targets.
In the case of Dogecoin, the price is reeling around the top of its falling wedge, where its upper and lower trend lines converge. DOGE’s latest bounce from the lower trend line increases its chance of testing the upper trend line for a breakout, as illustrated on the chart below.
The bullish setup attracts further support from the DOGE/BTC Daily Relative Strength Index (RSI) with a reading around 28. From a technical perspective, an RSI below 30 means the pair is oversold, which could cause its price to consolidate laterally or recover. .
In the event of a breakout, DOGE/BTC can rally to 500 sats in April, 50% higher than current price levels. The bullish target is measured after adding the maximum distance between the upper and lower trend lines of the falling wedge to the breakout point.
However, a decisive drop below the lower trend line of the falling wedge risks invalidating the entire bullish setup. Instead, DOGE may fall towards 280 sats, a historical support level down, around 13% of current price levels.
Such a scenario is possible given Dogecoin’s period with a failed falling wedge pattern in March 2022, in which the DOGE/USD pair broke below the lower trend line: 50% losses followed.
How for the price of DOGE?
However, Dogecoin could still fall against US dollars, largely due to growing macroeconomic uncertainty.
In recent years, the Dogecoin price has rallied mainly thanks to news-driven events and support from Elon Musk, including hopes for a DOGE payment option on Twitter.
Related: Why is the crypto market down today?
However, Musk said on March 3 that he would shift his focus from cryptocurrencies to artificial intelligence. The billionaire businessman did not specifically name Dogecoin, but many interpreted that Musk might distance himself from the industry in the future.
“I used to be in crypto but now I got interested in AI”
— Elon Musk (@elonmusk) March 3, 2023
Dogecoin price is down more than 20% to $0.06 since Musk’s tweet. Also, from a technical perspective, the price is well positioned to drop another 10% in the coming weeks on a retest of an old support level around $0.055-0.042.
Conversely, a bounce from the support range could see DOGE’s price rally test the upper trend line of the triangle at around $0.076, resulting in gains of roughly 15% of current price levels. .
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.
