Dogecoin Price to See a Post-Correction Surge, Why?

If history is anything to go by, Dogecoin price (DOGE) could be on the cusp of a significant breakout following a tough correction.

In recent weeks, the meme coin had retraced some by 46%, a chart pattern not too dissimilar to what it did during 2021 when a ~56% dip preceded a substantial upward movement. History repeats itself, so Dogecoin might be ready to light a bullish leg up as early as next week.

As one would expect from the cryptocurrency market, assets follow a typical cyclical trend of expansion and contraction in this pattern. This current correction may be a part of a bigger accumulation phase, which could signal the path to an upward trajectory.

Dogecoin Price Gains 10% Amid Market Recovery

Dogecoin has risen 10% over the last 24 hours at $0.3809. Recovery among the broader crypto market has coincided with the surge, with the Dogecoin market capitalization hitting $56.24b. Investor interest is also growing, as trade volume has surged 46%.

Dogecoin’s price action has been on the radar of market participants as a part of its correction, which has looked familiar with previous bull cycle corrections. DOGE analysts say the doggy coin has the potential to bounce off key levels and begin a new move higher. This sentiment is only further validated with increased trading activity, as buyers come in to scoop up DOGE on the current price.

– Advertisement –

Despite still being in dispute about Dogecoin’s utility as a currency for transactional use, its surprisingly active community and endorsement by some influential individuals such as Elon Musk drives its speculative potential. This dynamic has typically had a major role in Dogecoin’s price fluctuations, especially during bull market cycles.

Technical Analysis and Market Outlook

A technical analysis of Dogecoin’s chart makes it appear likely to break out similarly to 2021’s bull run. The weekly chart shows a pattern where Dogecoin saw a big sharp correction and entered a parabolic rally. But a price explosion ensued after a 56% decline in January 2021. At present, with a 46% correction worked out, analysts are suggesting we might see the same happen over the next couple of weeks.

On the one-hour chart, you can see that a double top formation (a bearish pattern) could cause further short-term consolidation. A break above resistance levels, however, could prompt renewed bullish momentum, given the steep recovery.

Also, the data from the Money Flow Index (MFI) suggests that Dogecoin is close to oversold risks as it now moves southern, making a rebound possible. Increased volume and another resurgence of buying pressure could accelerate a rally. DOGE could be set to move north strongly in the near term once the pattern repeats in the following cycle.