Is Dogecoin’s Sudden 25% Rally Sustainable or a Bull Trap?

On April 3rd, the Dogecoin price witnessed a massive surge as market participants reacted to the Twitter logo change from bluebird to Dogecoin face for a short period. As a result, the DOGE price soared 27% on the intraday level and triggered a five-month-long bullish pattern called a falling wedge pattern. Here’s how this pattern may assist buyers and coin holders to experience further rallies.

Key Points

• A bullish breakout from the resistance trendline of the falling wedge pattern is a sign of trend reversal 
• A post-breakout pullback may tumble the DOGE price by 5% or 13% to recuperate bullish momentum
• The 24-hour trading volume in the Dogecoin coin is $4 Billion, indicating a 421% gain.

Source-Tradingview

In the last five months, the Dogecoin price downtrend was restricted between two converging trendlines which revealed the formation of a falling wedge pattern. In theory, the price spread narrowing within these two trendlines is a sign of weakening bearish momentum which eventually turns out for buyers regaining trend control. 

Thus, on March 3rd, the DOGE price showcased massive gains after its logo replaced the bluebird profile which some belief was a strategic move by Elon while some say late April fool joke. Anyhow, this price surged, breached the resistant trendline of the wedge pattern, and reached a four-month high of around $0.104.

Also Read: Here’s Why Elon Musk Changed Twitter’s Logo To That Of Dogecoin (DOGE)

As of now, the coin price is struggling to sustain above a local resistance of $0.0987, where the higher price rejection candles indicate the short-term traders are getting out with early profits. Anyhow after a massive surge a minor pullback is expected as to check price sustainability above higher levels.

Thus, the DOGE price is likely to witness a temporary correction to $0.0925 or the breached trendline around $0.0825 before the next recovery cycle began.

The coin buyers must show sustainability above this level as any further breakdown will weakness the bullish thesis and hints at a fake breakout

Technical indicators

Relative Strength Index (RSI): The daily RSI slope moving high in the bullish territory reflects positive sentiment around market participants for the bullish rally.

Exponential Moving Average: the sudden growth in DOGE price has left its moving averages(20, 50, 100, and 200) behind usual calls for a price reversal to sustain a longer bull run

Dogecoin Price Intraday Levels

• Spot rate: $0.096
• Trend: Bullish
• Volatility: Medium
• Resistance levels- $0.08 and $0.091
• Support levels- $0.07 and $0.06