Dogecoin (DOGE) Price May Double Soon As It Forms Bullish Falling Wedge Pattern

The Dogecoin price has weakened recently following a particularly bearish month of August that sent the crypto market spiralling. In the wake of this, multiple cryptocurrencies in the market have begun to move toward finding support in anticipation of a possible recovery.

The price of Dogecoin (CRYPTO: DOGE) has declined sharply in recent weeks, forming a falling wedge pattern on the price chart. This technical formation could be signaling a rapid recovery for DOGE, with the potential for the price to double from current levels.

The Falling Wedge Pattern

A falling wedge pattern is a bullish reversal formation that typically occurs during a downtrend. It is characterized by two converging trendlines, one connecting a series of lower highs and the other connecting a series of higher lows. As the price moves within the wedge, the volume tends to decrease, indicating a loss of momentum in the downtrend.

In the case of DOGE, the upper trendline of the falling wedge is formed by the resistance levels at $0.108, $0.102 and $0.098, while the lower trendline is formed by the support levels at $0.092, $0.087 and $0.082. The apex of the wedge is around $0.075.

Breakout Implications

If the price of DOGE manages to break out of the falling wedge pattern, it could trigger a sharp rally, depending on the strength of the breakout. The first major resistance zone is at $0.096, which is also the level to watch for support if the bullishness is to continue.

According to crypto analyst Simon on TradingView, a breakout from this level could pave the way for a 50% rally, putting the next resistance as high as $0.151.

“A breakout above $0.151 could pave the way for an advance toward the next resistance zones, potentially driving the price even higher,” the analyst noted.

If this breakout is completed, it will be significant for the price of DOGE, as it will be the start of a notable rally. The next major resistance is at $0.151, which means that this is the level to break to continue the rally.

From here, the next resistance levels are at Fib extensions of 127.2% ($0.17), 141.4% ($0.18) and 161.8% ($0.19), with the last Fib extension also serving as a round number resistance.

The Downside Of A Breakdown

However, it's important to note that if the price of DOGE fails to hold up above $0.096, it could lead to a breakdown in the bullish structure.

“If momentum weakens at this support, we could see a pullback to the lower support area around $0.080-$0.087,” the analyst adds.

To close, the analyst notes that investors should keep a close eye on the price of DOGE, adding, “A daily close below this demand area (around $0.080) could invalidate the bullish scenario and trigger further declines.”