Dogecoin hits 4-month lows vs. Bitcoin – 50% DOGE Price Retracement Now In Play
Dogecoin (DOGE) pared some 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 an extended bounce ahead?
On the daily chart, the DOGE/BTC pair reached 331 rate, up 4.75% compared to the previous day’s low of 316 rate. The bounce occurred around a multi-month falling trendline, which has limited the pair’s downside moves since November 2022.
DOGE price vs. BTC
Interestingly, the descending trend line DOGE/BTC looks like part of a prevailing falling wedge pattern. Traditional chart analysts consider the falling wedge a bullish reversal setup, especially because of the pattern’s 62% success rate in hitting upside price targets.
In Dogecoin’s case, the price oscillates around the top of the falling wedge, where its upper and lower trend lines converge. DOGE’s recent pullback from the lower trendline raises the possibility of testing the upper trendline for a breakout, as illustrated in the chart below.
The upside setup draws further support from the DOGE/BTC daily relative strength index (RSI) reading around 28. From a technical perspective, an RSI below 30 means the pair is oversold, which could cause the price to consolidate sideways or rebound.
In the event of a breakout, DOGE/BTC could rise towards the 500 rate by April, up 50% from today’s price level. The upside target is measured after adding the maximum distance between the falling wedge’s upper and lower trendline to the breakout point.
However, a decisive drop below the falling wedge’s lower trendline risks invalidating the entire upside setup. Instead, DOGE may fall towards 280 rate, a historical support level down, around 13% from today’s price level
Such a scenario is possible given Dogecoin’s stint with a failed falling wedge pattern in March 2022, where the DOGE/USD pair broke below the lower trendline – 50% losses followed.
Which way for DOGE price?
However, Dogecoin may still fall in the US dollar, mainly due to growing macroeconomic uncertainty.
In recent years, the Dogecoin price has risen primarily on the heels of news-driven events and Elon Musk’s support, including hopes for a DOGE payment option on Twitter.
Related: Why Is The Crypto Market Down Today?
However, Musk said on March 3 that he would shift his focus from cryptocurrencies to artificial intelligence. The billionaire entrepreneur did not mention Dogecoin specifically, but many interpreted that Musk may distance himself from the industry going forward.
The price of Dogecoin has fallen by more than 20% to $0.06 since Musk’s tweet. Additionally, from a technical perspective, the price is well positioned to fall another 10% in the coming weeks in a retest of an old support level around $0.055-0.042.
Conversely, a bounce from the support range could cause DOGE’s price rally to test the triangle’s upper trend line at around $0.076, resulting in gains of about 15% from today’s price level.
This article does not contain investment advice or recommendations. All investment and trading moves involve risk and readers should conduct their own research when making a decision.
