The Dogecoin price has weakened recently following a particularly bearish month of August that sent the crypto market spiralling. In the wake of this, multiple cryptocurrencies in the market have begun to move toward finding support in anticipation of a possible recovery. Dogecoin is no different, but unlike a lot of others, the move toward support is signaling a rapid recovery for the DOGE price that could see it double from here.
Dogecoin And The Falling Wedge Pattern
With the decline in price, the Dogecoin price has formed a falling wedge pattern, as outlined by a crypto analyst Simon on TradingView. Now, as the meme coin continues to follow this falling wedge pattern, it holds a number of implications for the price. One of these is a possible price breakout depending on how well it is able to hold its price.
From here, the first major support zone lies at $0.096, making it the level to maintain if the bullishness is to continue. Also, at this level, the crypto analyst points out that the Dogecoin price is looking to break out of its descending resistance line. A successful break from here could trigger a 50% rally, putting its next resistance as high as $0.151.
If completed, this move will be important for the DOGE price as it will be the start of a notable rally. Since the next major resistance is at $0.151, it means that this is the level to break to continue the rally. “A breakout above $0.151 could pave the way for an advance toward the next resistance zones, potentially driving the price even higher,” the crypto analyst explains.
If this breakout is completed, then the crypto analyst puts the Dogecoin price as high as $0.19. This 100% move, while bullish, will inadvertently put it in the path of another major resistance just above $0.19, one which could prove much harder to break.
The Downside Of A Breakdown
Just like with any analysis, the analyst acknowledges a situation where the Dogecoin price could break down. This could happen if the Dogecoin price is unable to hold up above $0.096. Such a break below an important support level could drive it farther down.
The crypto analyst further adds that momentum needs to keep up to maintain the bullishness. “It’s essential to stay cautious. If momentum weakens at this support, we could see a pullback to the lower support area around $0.080-$0.087,” the analyst adds.
To close, the crypto analyst tells investors to keep a close eye on the DOGE price from here. “A daily close below this demand area could invalidate the bullish scenario and trigger further declines,” Simon warned.
Featured image created with Dall.E, chart from Tradingview.com
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