Dogecoin Price Forecast: Bullish Indicators Signal a 27% Rally

Dogecoin Price Forecast: Bullish Indicators Signal a 27% Rally

Dogecoin (DOGE) is showing signs of a potential rebound as a bullish pattern takes shape on its daily chart. Currently positioned at the bottom of a bullish market structure, DOGE has the potential to surge by up to 27%.

In the aftermath of the recent market downturn, many Dogecoin investors rushed to offload their holdings onto exchanges. However, as the market begins to recover, the influx of DOGE to exchanges has slowed down, paving the way for a possible bullish rally for the meme coin.

Dogecoin Price Outlook: A Potential Reprieve in Sight

DOGE’s price action is currently trending downward within a falling wedge pattern—a formation often seen as a precursor to a bullish reversal. The latest candlestick formations reveal a strong rebound off the wedge’s lower boundary, accompanied by significant trading volume, which suggests a potential reversal may be on the horizon.

The price movement within this falling wedge indicates a corrective wave may be coming to an end. The recent bounce off the lower boundary could signal the start of a new impulsive wave.

Although the 50-day EMA at $0.122 and the 200-day EMA at $0.126 are positioned above the current price, reinforcing a bearish trend, DOGE has found immediate support at $0.095, close to its recent low. Resistance is observed at $0.1053, the recent high, and the 50-day EMA at $0.122.

The Relative Strength Index (RSI) sits at 32.50, placing DOGE in oversold territory, which may suggest an upcoming price rebound. Meanwhile, the Chaikin Money Flow (CMF) is at -0.03, indicating mild selling pressure that is not excessively strong.

If Dogecoin manages to break above the falling wedge, it could set the stage for a long-term bullish trend, with new price targets potentially reaching $0.14, $0.17, and $0.21.

While the falling wedge pattern hints at a possible reversal, especially given the increased trading volume and oversold RSI, short-term traders might find opportunities to go long. However, long-term investors may want to wait for a clearer confirmation of a trend reversal before committing.

On-Chain Metrics Point to a Short-Term Rally

On-chain data from IntoTheBlock reveals that Dogecoin investors are increasingly withdrawing their assets from exchanges, with exchange inflows declining by 38.85% from $664.48 million to $426.24 million over the past day. This follows a peak in exchange inflows, the highest seen in the last month, spurred by the recent market crash.

Additionally, Dogecoin’s open interest has seen a slight uptick of 0.09%, indicating a recent increase in market activity. Combined with the rising price, this could be a sign of growing buying pressure for DOGE.

A potential 27% price rise would benefit over 451,000 Dogecoin holders who bought the asset between $0.10 and $0.14, protecting them from losses.

Furthermore, recent developments in payment integration on X (formerly Twitter) could act as a catalyst, pushing Dogecoin’s price into a breakout zone.

However, if market conditions take a bearish turn, renewed inflows of Dogecoin to exchanges could signal panic among investors, potentially leading to further declines in the asset’s price.