Dogecoin (DOGE) has been sealed in a downtrend as it struggles with recovery. A bullish chart formation on the daily chart points to a 36% upward move. A daily candlestick above $0.075 that flips it into a support level will confirm the bullish breakout for DOGE.
Dogecoin Bulls Could Exploit A Rounding Bottom Pattern To $0.09
After turning away from the $0.0756 swing high on May 17, DOGE dropped as much as 28% to set a swing low at $0.0538 before rising to the current level at $0.0658. At the time of writing, the popular meme coin was down 3% on the day but up 6.19% over the last seven days. With a market cap of $10 billion, Dogecoin cemented it poistin eight spot according the CoinMarketCap ranking.
Dogecoin’s price action had formed a rounding bottom chart pattern on the daily chart, forecasting a massive move to the upside once it is confirmed.
A rounding bottom chart pattern is a significantly bullish technical formation that is identified by a series of price movements that graphically form the shape of a “U”. A rounding bottom is found at the end of extended downward trend and signifies a reversal in long-term price movements.
For Dogecoin, shattering the immediate resistance provided by the 50-day Simple Moving Average (SMA) at $0.069 will see the price rise to reach the chart pattern’s neckline at $0.0750, embraced by the 100-day SMA.
A daily candlestick close above this level would confirm the rounding bottom chart pattern with the next line of resistance emerging from the 200-day SMA sitting at $0.078. Overcoming this hurdle would open the path toward the bullish target of the governing chart pattern at $0.090. Such a move would bring the total gains to 36.62% from the current price.
DOGE/USD Daily Chart
On the other hand, things do not really look good for the leading meme coin as it trades below all the major SMAs which pose tough resistance zones as described above. Additionally, DOGE trades in a third consecutive bearish session, suggesting that the market conditions favor the downside at the moment.
This is reinforced by the position of the Relative Strength Index (RSI) at 48 in the negative region, This shows that the price action still favors the downside. As such, inability to produce a decisive close above the 50-day SMA could see Dogecoin price drop below the immediate support level at $0.065.
Below that the next logical move would be a revisit of the chart pattern’s bottom at the $0.060 psychological level. Traders could expect DOGE to take a breather here, giving the bulls time to regroup and buy the altcoin at a discount before staging another recovery.
