In the last bullish surge at the end of April, Dogecoin saw a significant rise, reaching $0.18, backed by strong momentum and volume. However, this dog-themed cryptocurrency has since retreated to important support levels. Yet, technical signals suggest a possible short-term recovery could be on the horizon.
Will a Chart Pattern Drive a Dogecoin Rally?
Recently, Dogecoin encountered bearish trends, causing it to drop back to the $0.16 support level. Following a period of price correction, there are signs indicating a potential reversal for DOGE.
Crypto analyst Trader Tardigrade has identified a positive trend in Dogecoin’s chart, indicating a shift in price behavior. Analyzing the 1-day chart, he uncovered an essential pattern known as the Diamond Bottom Reversal Formation.
This bullish pattern suggests that the current correction for DOGE is nearing its conclusion. The chart shows that the meme coin attempted to break through the upper line of this pattern but faced a minor pullback. Upon a successful breakout, Trader Tardigrade anticipates a sharp increase towards the $0.35 mark.
A Diamond Bottom Reversal Formation, often referred to as a bullish diamond pattern, indicates a potential trend reversal after a sustained downward phase. It is characterized by a diamond-shaped pattern formed by converging trendlines following continuous negative price movement.
The implication of the diamond bottom formation suggests that DOGE may be gaining momentum for a future upward move. Consequently, this important chart pattern could signal a bounce back to greater price levels soon.
In another technical analysis, Trader Tardigrade pointed out that critical momentum indicators are showing positive signs, despite the current downturn. One such indicator is the Dogecoin Price Momentum Oscillator (PMO), which assesses the price change rate over a certain timeframe. This helps in identifying trend reversals and overbought/oversold situations.
He noted a potential bullish crossover in the PMO indicator, which is “turning into green time.” A transition to green in the PMO indicator implies a forthcoming phase of upward price movement for DOGE.
Could DOGE Ignite a Meme Coin Frenzy?
Even with ongoing corrections, the Dogecoin community remains optimistic. Crypto trader Kamran Ashgar emphasized that DOGE is gaining traction, setting the stage for a price recovery, as indicated by the Relative Strength Index (RSI).
When DOGE starts to rise, the analyst believes that other meme coins might follow suit, potentially triggering a memecoin frenzy. His forecast is based on a 28-day trend that indicates DOGE is poised to break out of this cycle. According to Ashgar, “this is not just a breakout; it is a signal” for positive movements ahead.
