Dogecoin (DOGE) pared some losses against Bitcoin (BTC) on March 10, a day after the DOGE/BTC pair fell to its lowest levels since October 2022. Can DOGE price expect a longer recovery?
On the daily chart, the DOGE/BTC pair hit 331 sats, up 4.75% from the previous day’s low of 316 sats. The bounce occurred around a multi-month descending trendline that has limited the pair’s downside since November 2022.
DOGE/BTC daily chart. Source: TradingView
DOGE price vs. BTC
Interestingly, DOGE/BTC descending trendline appears to be part of a prevailing falling wedge pattern. Traditional chart analysts view the falling wedge as a bullish reversal setup, particularly given the pattern’s 62% success rate in hitting its price targets to the upside.
In the case of Dogecoin, the price is oscillating around the apex of its falling wedge, where its upper and lower trend lines converge. DOGE’s recent bounce off the lower trendline increases its likelihood of testing the upper trendline for a breakout, as illustrated in the chart below.
DOGE/BTC daily chart showing falling wedge breakout. Source: TradingView
The upside setup continues to be supported by the daily DOGE/BTC Relative Strength Index (RSI) reading around 28. From a technical point of view, an RSI below 30 means the pair is oversold which could result in the price consolidating or recovering sideways.
In the event of a breakout, DOGE/BTC can surge to 500 sats by April, a 50% increase from current price levels. The upside target is measured after adding the maximum distance between the upper and lower trend lines of the falling wedge to the breakout point.
However, a decisive drop below the lower trendline of the falling wedge risks nullifying the entire upside setup. Instead, DOGE can drop towards 280 sats, down a historical support level, around 13% from the current 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 ensued.
Where to go for the DOGE Prize?
However, Dogecoin could still fall in US dollar terms, mainly due to increasing macroeconomic uncertainty.
Over the past few years, Dogecoin price has rallied largely due to news-driven events and support from Elon Musk, 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 didn’t specifically name Dogecoin, but many interpreted that Musk could distance himself from the industry as they evolve.
Dogecoin’s price has fallen more than 20% to $0.06 since Musk’s tweet. Furthermore, from a technical perspective, the price is well-positioned to drop another 10% in the coming weeks on a retest of old support levels around $0.055-0.042.
Weekly DOGE/USD price chart. Source: TradingView
Conversely, a rebound from the support range could see DOGE’s price rally test the upper trendline of the triangle at around $0.076, which would result in a gain of around 15% from the current price level.
This article does not contain any investment advice or recommendation. Every investment and trading move involves risk and readers should do their own research when making a decision.
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