Dogecoin (DOGE) recently broke out of a falling wedge pattern that it had been trading in for several months. As such, such a breakout usually signals a potential bullish reversal, indicating a continuation of the rally.
When a descending wedge is broken, the price often rises by the maximum distance between the upper and lower trendlines. For Dogecoin, this could suggest a significant price increase of up to 72%. Should memecoin holders anticipate such a rally?
Dogecoin holders remain bullish
Dogecoin’s positive funding rate highlights growing optimism among its holders about its potential for a sustained rally. Trading at $0.11 at the time of writing, the memecoin has seen a price increase of over 10% over the past week.
Since September 17, the coin has only shown a positive funding rate, indicating persistent demand for long positions. This is a bullish sign as it creates a self-reinforcing cycle where more traders enter the market because they believe the coin’s price will rise — a sentiment that ultimately drives prices higher.
Read more: How to Buy Dogecoin (DOGE), Cryptocurrency Overview and Outlook
At the time of publication, the memecoin funding rate is 0.01%.
Dogecoin’s Aroon indicator, which measures trend strength, supports the possibility of a continuation of the rally. The Aroon Up Line, currently at 100%, signals that DOGE is in a strong uptrend, with buying pressure keeping prices close to recent highs.
Dogecoin Funding Rate. Source: Coinglass
Traders view a 100% reading as a sign that the uptrend may persist, especially when the Aroon Down Line is low. Currently, DOGE’s Aroon Down Line is at 28.57%, indicating a lack of recent lows and reinforcing the strength of the current uptrend.
Dogecoin Aroon Indicator. Source: TradingView
Price forecast
As mentioned, a breakout above a falling wedge pattern usually sees the asset’s price rise by the maximum distance between the upper and lower trendlines. In DOGE’s case, therefore, this suggests a potential 72% surge, taking its price to $0.19.
However, for this rally to occur, DOGE must first break a key resistance level at $0.15. A successful retest of this level could pave the way for the price to reach $0.19.
Read more: How to buy Dogecoin (DOGE) with PIX
On the other hand, if profit-taking increases and the demand for DOGE weakens, the price could retest the upper boundary of the descending wedge. If this level fails to hold as support, the price of Dogecoin could drop to $0.08.
Dogecoin Price Analysis. Source: TradingView
The article Dogecoin (DOGE) Breaks Pattern and Could Rally 70% – Analysis was first seen on BeInCrypto Brazil.
