Dogecoin (DOGE) pared some of its losses against Bitcoin (BTC) on March 10, a day after the DOGE/BTC pair fell to its lowest level since October 2022. Could DOGE price see a full rebound ahead?
On the daily chart, the DOGE/BTC pair reached 331 sats, up 4.75% compared to the previous day’s low of 316 sats. The bounce occurred around a multi-month downtrend line, which covered the pair’s downward movement since November 2022.
price of DOGE vs BTC
Interestingly, the DOGE/BTC downtrend line appears to be part of an existing wedge pattern. Traditional chart analysts view a descending wedge as a bullish reversal setup, especially given the pattern’s 62% success rate in hitting its upside price target.
In the case of Dogecoin, the price oscillates around the peak point of the falling wedge, where the upper and lower trend lines converge. DOGE’s recent rebound from the lower trend line increases the possibility of testing the upper trend line for a breakout, as illustrated in the chart below.
The upward setup draws support from the daily relative strength index (RSI) of DOGE / BTC with a reading around 28. From a technical perspective, an RSI below 30 means that the pair is oversold, which may cause the price to consolidate sideways or rebound. .
If there is a breakout, DOGE/BTC could rise to 500 sats in April, up 50% from the current price level. The upward target is measured after increasing the maximum distance between the upper and lower trend lines of the falling wedge to the breakout point.
Decisive drop below the trend line below the descending wedge, but the risk will invalidate the entire up setup. However, DOGE can go down to 280 sats, the historically low support level, about 13% of the current price level
This scenario is possible due to the Dogecoin task with a failed wedge pattern in March 2022, where the DOGE / USD pair broke below the lower trend line – 50% loss.
How to price DOGE?
Dogecoin may still fall in US dollar terms, but mostly due to increasing macroeconomic uncertainty.
In recent years, the price of Dogecoin has risen mainly due to news-driven events and Elon Musk’s support, including the prospect of a DOGE payment option on Twitter.
Related: Why is the crypto market down now?
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 it as Musk’s move away from the industry.
“I used to be in crypto, but now I’m interested in AI”
– Elon Musk (@elonmusk) March 3, 2023
The price of Dogecoin has dropped more than 20% to $0.06 since Musk’s tweet. Moreover, from a technical point of view, the price is well positioned to drop another 10% in the coming week on a retest of old support levels around $0.055-0.042.
On the contrary, a bounce from the support range could have the DOGE price rally test the upper trend line of the triangle around $0.076, yielding a gain of about 15% from the current price level.
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 decisions.