Dogecoin (DOGE) pared some losses against Bitcoin (BTC) on March 10, a day after the DOGE/BTC pair fell to its lowest level since October 2022. Can DOGE price see an extended bounce?
On the daily chart, the DOGE/BTC pair hit 331 sats, up 4.75% from the previous day’s low of 316 sats. The bounce occurred around a multi-month descending trendline, which has capped the pair’s downward moves since November 2022.
Price DOGE vs BTC
Interestingly, the descending DOGE/BTC trendline appears to be part of a dominant descending wedge pattern. Traditional chart analysts consider the falling wedge to be a bullish reversal setup, not least because of the setup’s 62% success rate in hitting its upside price targets.
In the case of Dogecoin, the price oscillates around the high point of its falling wedge, where its upper and lower trendlines converge. DOGE’s latest bounce from the lower trendline increases its possibility of testing the upper trendline for a breakout, as shown in the chart below.
The upside setup is further pulling support from DOGE/BTC’s daily Relative Strength Index (RSI) with a reading of around 28. From a technical standpoint, an RSI below 30 means the pair is oversold, which could prompt its price to consolidate sideways or rebound. .
In the event of a breakout, DOGE/BTC may hit 500 sats by April, up 50% from current price levels. The upside target is measured after adding the maximum distance between the upper and lower trendline from the falling wedge to the breakout point.
A decisive drop below the lower trendline of the falling wedge, however, risks invalidating the entire bullish setup. Instead, DOGE may drop towards 280 sats, a historical support level down, around 13% from current price levels
Such a scenario is possible considering Dogecoin’s passage with a failed falling wedge pattern in March 2022, in which the DOGE/USD pair broke below the lower trendline – 50% losses followed.
What way for the DOGE award?
However, Dogecoin could fall further in US dollar terms, largely due to growing macroeconomic uncertainty.
Over the past few years, the Dogecoin price has risen primarily on the heels of 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 entrepreneur didn’t name Dogecoin specifically, but many interpreted that Musk might distance himself from the industry in the future.
The price of Dogecoin has fallen over 20% to $0.06 since Musk’s tweet. Additionally, from a technical standpoint, the price is well positioned to decline another 10% in the coming weeks when retesting an old support level at around $0.055-0.042.
Conversely, a bounce off the support range could cause rising DOGE prices to test the upper trendline of the triangle at around $0.076, leading to around 15% gains from price levels. current.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.