Dogecoin price zigs when it should zag, but DOGE still poised for higher prices
|- Dogecoin continues to locate support around the handle high of a cup-with-handle base.
- DOGE closed last week with the best weekly performance since the beginning of May.
- Dogecoin price rally since the July low has been highlighted by three prominent positive days, each exceeding 10%.
Dogecoin price orchestrated a 15.61% gain on August 15 to confirm the original breakout from a cup-with-handle pattern on August 12. The spike higher was met with selling pressure, pressing DOGE down to the handle high of $0.288, before attracting a new bid. Nevertheless, the digital coin has not reclaimed the August 16 high of $0.355, setting the meme token to form a base on base pattern that may be the catalyst for a resumption of the developing rally.
Dogecoin price creates a new opportunity for latecomers
Despite the recent 80% correction and an 80% correction in January, Dogecoin price is still on pace to record six consecutive positive quarters. It has been a roller-coaster ride for DOGE investors, but the emergence from a cup-with-handle base has solidified the potential for the altcoin to seek out higher prices using a rare, but powerful base-on-base pattern.
The measured move of the original cup-with-handle base is 45%, claiming a DOGE profit target of $0.417 while breaking the resistance defined by the 38.2% Fibonacci retracement of the May-July correction. The target does fall short of the 50% retracement at $0.457 and the tactically important June high at $0.463.
To capitalize on a renewed Dogecoin price rally, speculators should target the August 16 high of $0.355 as the new entry price with a daily close below the handle high of $0.288 as the stop. The triggering of the base-on-base pattern reinforces the uptrend kickstarted by the August 7 gain of 28.14% and improves the potential for DOGE to break the resistance outlined by the 50% retracement and the June high.
A break above the June high of $0.463, a level reinforced by the mid-May highs, puts Dogecoin price in a favorable position to test the confluence of the 61.8% retracement at $0.529 with a series of DOGE highs printed in mid-May, before the May 19 crash.
DOGE/USD daily chart
If Dogecoin price does not activate the base-on-base pattern the stop remains a daily close below the rising 50-day SMA at $0.229. Alternatively, if DOGE does trigger the base-on-base pattern the stop is raised to the handle high at $0.288.
Dogecoin price initially broke out from the cup-with-handle base on August 12, but quickly reversed back into the handle, before confirming the breakout on August 15 with a 15.61% gain. However, DOGE pulled back again, testing the handle high which it has held so far.
The propensity to zig when it should zag has introduced a new challenge for DOGE, but if a breakout from the base-on-base occurs, the altcoin is primed to rally farther than originally forecasted.
Here, FXStreet's analysts evaluate where DOGE could be heading next as it seems poised to advance further.
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