The Dogecoin (DOGE) price broke out from a long-term descending wedge and then created a short-term double-bottom pattern.
While the increase is expected to continue in the short term, the direction of the long-term trend is still unclear.
Dogecoin Price Creates Bullish Pattern
The technical analysis from the daily time frame shows that the DOGE price broke out from a descending wedge on May 16. The wedge is considered a bullish pattern, meaning that it leads to breakouts most of the time.
However, the price failed to sustain the increase after the breakout. Rather, it returned to its pre-breakout level.
Despite this seemingly bearish movement, DOGE created a double bottom pattern combined with long lower wicks (green icons). Similarly to the wedge, the double bottom is considered a bullish pattern.
Additionally, the wicks are considered a sign of buying pressure, since sellers were not able to push the price down. Rather, buyers took over and caused the price to close higher.
DOGE Price Prediction: How Long Will Bounce Continue?
A closer look at the daily time frame gives a bullish DOGE price prediction. The main reasons for this are the wave count and the RSI readings.
The wave count shows a completed five-wave downward movement (white) inside the wedge. Since the movement is complete, a retracement is likely.
If one occurs, the closest resistance will be between $0.087 and $0.091, created by the 0.5-0.618 Fib retracement resistance levels.
The theory of Fibonacci retracement levels suggests that after a substantial price move in one direction, the price will partially retrace or return to a prior price level before continuing in its original direction. This principle can be used to determine the peak of potential future upward movements.
Despite this bullish short-term price prediction, a drop below the wave 5 low at $0.069 (red line) will mean that the trend is still bearish. In that case, the DOGE price could fall to $0.050.
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