Dogecoin has had a rather disappointing week on the charts. A symmetrical triangular collapse played out in favor of the bears as short sellers initiated further drawdowns below $ 0.280. In fact, DOGE was the worst weekly performer among the top 10 coins, down over 11%.
On the upside, DOGE’s descending wedge offered opportunities for an impending price spike and comeback above the August 15 swing high of $ 0.35. At the time of writing, DOGE was trading at $ 0.290, with a market cap of $ 38.12 billion.
Dogecoin 12-hour chart
Before jumping into a widening wedge setup, it’s important to understand that this pattern has not yet fully taken shape. In fact, another low was forecast at $ 0.280. In the event of an early outbreak, DOGE would initially have to close decisively above the 20-SMA (red).
This would take DOGE towards the next targets at $ 0.35 and the May 25 swing high of $ 0.38. On the flip side, a low below $ 0.26 would be an opportunity for short sellers to incur additional losses.
After DOGE returned from its 12 hour 200 SMA, some of its indicators saw important developments. For example, the RSI avoided plunging into bearish territory and stayed close to equilibrium, adding weight to a favorable rebound.
Meanwhile, the MACD was nearing a bullish crossover as selling pressures eased in recent days. Similarly, the Directional Movement Index was on the brink of an important crossover above the -DI line. All of these signs acted as buying triggers in the market.
After Dogecoin posted its recent losses, it set the tone for an upward trajectory. Its price has been trading within the confines of a descending wedge setup – a pattern that usually triggers an upward breakout.
Take profits can be set between $ 0.35 and $ 0.38 in the event of such an outcome. However, a low of $ 0.280 could be formed prior to such a move, making it an ideal buying opportunity for bullish traders.