Dogecoin (DOGE) Price Analysis: Bullish Recovery Signs Emerge After Breaking Above Macro Falling Wedge Trend

Over the past week, many memecoins have recorded significant losses. Dogecoin [DOGE] is among them, with the crypto down by 12.4%.

Dogecoin [DOGE] saw some moderate gains on the price charts over the last 24 hours. At press time, the memecoin was trading at $0.109, and several crypto analysts were discussing its price action.

One such analysis was by Kevin Capital, where the analyst highlighted the memecoin’s potential upside on the charts. According to the analysis, DOGE’s price action showed signs of potential bullish recovery after peaking above its macro falling wedge trend over the past 48 hours.

This 48-hour recovery indicated that the recent breakdown may be a false bearish signal and the memecoin is now in a bullish backtest. A successful backtest would confirm that the wedge’s trendline is holding as support, leading to an upwards breakout.

Falling wedges are usually considered a bullish reversal pattern that occurs during a downtrend. It signifies that selling pressure is weakening and a breakout to the upside may be imminent.

When it comes to breakouts from this trend, they are considered a bullish reversal, especially after an extended downtrend. As it forms, it signifies that buyers may be taking over.

For instance, in 2021, Dogecoin saw a parabolic rise during the meme-driven bull market. Over this period, the memecoin surged by 1333% in 2 days, reaching $0.0459.

This was followed by a bullish move, where DOGE went on to surge by 10531% over 100 days, hitting an ATH of $0.70.

Hence, if this analysis were to hold, it would see DOGE clock in gains on the price charts.

What did the charts have to say?

As observed above, the prevailing market conditions seemed to be setting Dogecoin up for further gains in the short term.

To begin with, Dogecoin’s DyDx exchange funding rate remained positive over the last week.

This indicated that long position holders were paying shorts during market downturns to hold their positions. Such behavior in the market is a sign of confidence in the memecoin’s prospects.

Moreover, this demand for long positions could be further supported by a positive Open Interest (OI) weighted funding rate.

Additionally, the netflow from large holders spiked over the last week, moving from a low of 37.43 million to 563.1 million. Such a surge suggested that more large holders were adding to their investments and holdings, as opposed to those withdrawing to sell. This signaled confidence among large holders as they anticipated further price gains.

In simpler terms, the market sentiment was largely favorable for Dogecoin at the time of writing. If these conditions were to hold, it would see DOGE break out of the stubborn resistance level at $0.11105. A breakout from this level would see the memecoin clock in gains and hit $0.134.

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