Dogecoin price fumbles the opportunity, but DOGE clings to bullish aspirations

• Dogecoin price seeks to break the losing streak of six weeks as it currently carries an 11% gain for the week.
• The May 19 low remains an obstacle for DOGE as the digital asset pursues a confirmation of the double pattern.
• Elon Musk reiterates support for Dogecoin in a live discussion with Twitter’s Jack Dorsey and major shareholder Cathie Wood.

Dogecoin price falters after breakout above May's descending trend line. Probabilities of the breakout continuing do remain in favor of the bulls. Still, it will be challenging if there is no renewal in the momentum that accompanied the initial burst higher.

Elon Musk elaborates on ideas on how to use Dogecoin and Ethereum

During a widely anticipated live discussion with Twitter’s Jack Dorsey and successful investor Cathie Wood, Elon Musk reiterated his commitment to DOGE. He hinted at combining Dogecoin with Ethereum to max transaction rates and lower transaction costs.

“There may be some merit in combining something like ethereum and dogecoin.”

Despite his interest and bullish Dogecoin comments in the discussion and Twitter, Musk stated that he “might pump” but does not dump cryptocurrencies.

Musk also discussed his plans on Bitcoin, stating that Tesla will likely restart Bitcoin payment functionality and that SpaceX bought Bitcoin.

Overall, Musk was bullish about the cryptocurrency space and appeared optimistic on crypto mining evolution, such as the heat generated by mining computers being used for other purposes.

Dogecoin price momentum disappears

Finally, on July 21, Dogecoin price closed above the demanding resistance of May’s descending trend line, but the meme token failed to hold the 27% gain and closed with just an 11.44% move. Nevertheless, it was an inflection point despite the obvious scramble to use the strength to cut or liquidate DOGE positions.

The follow-through has been underwhelming as Dogecoin price has not traded above the July 21 high of $0.218, opting for three days of price churn near the May 19 low of $0.195 and a marginal gain. It is not the anticipated outcome for DOGE considering the breakout above May’s descending trend line from a bullish momentum divergence at the July low and a double bottom pattern triggering on the intra-day charts.

With the rebound now looking inconclusive, Dogecoin price may need a retest of the descending trend line now at $0.169, or even drop to the neckline of the governing head-and-shoulders pattern at $0.163 to generate renewed momentum. It would equal -18% downside potential for DOGE from the current price. 

Nonetheless, as long as Dogecoin price remains above those levels, it is fair to maintain DOGE projections to the upside. The opportunity is notable, with the 50-day simple moving average not appearing until $0.250, representing a 25% gain from the current price. If the bid is sustained, the cryptocurrency may reach the June 25 high of $0.291, putting a 46% profit on the table from the current price.

Based on the June 25 high target, DOGE investors are presented with a risk/reward ratio of 2:1.

DOGE/USD daily chart

A close below the neckline will introduce a fall to the April 23 low of $0.135. If there is a collective sell-off in the cryptocurrency complex, Dogecoin price may explore the support at the January 29 high of $0.100, marking a 39% loss from the neckline.

Moreover, the loss would turn all the primary support levels mentioned above into resistance, thereby erecting a barrier for Dogecoin price and suspending the aspirations of revisiting the May highs.

The reversal of the 27% gains on July 21 down to 11% combined with the price churn over the last four days is not the recipe for substantial gains and suggests that DOGE has fumbled the opportunity. However, as long as Dogecoin price holds above the immediate support, the probabilities are still slightly shifted to bullish outcomes moving forward, despite the disappearance of momentum.

Here, FXStreet's analysts evaluate where DOGE could be heading next.