- Dogecoin price is hovering above the $0.048 support level after a 72% crash in the last 70 days.
- The MRI indicator flashes a buy signal on the weekly time frame, suggesting the possibility of a bottom.
- A weekly candlestick close below $0.048 will invalidate the bullish thesis and signals for DOGE.
Dogecoin price has flipped multiple support levels into hurdles since May 2021. The most recent crash caused by varied factors seems to have taken the most toll on DOGE. Despite the bleak outlook on the crypto markets, this technical indicator is hinting at a potential recovery rally.
Dogechain: The DOGE Testnet
Adding a bit of bullishness to this recovery outlook is the launch of the Dogechain testnet on June 15. The new testnet is built on the Polygon Edge, which provides DOGE developers with a new blockchain network while “providing full compatibility with Ethereum smart contracts and transactions.”
The Dogechain will use the Istanbul Byzantine Fault Tolerant (IBFT) consensus mechanism and support Proof of Stake (PoS).
This revamp, could hopefully, breathe life into Dogecoin and its market value, which has remained lull since the appearance of Dogecoin-killer Shiba Inu.
Dogecoin price is ready for reversal
Dogecoin price has produced three distinctive lower highs that can be connected using a trend line. Doing so reveals that any attempts at recovery during the 93% crash were hammered by this trend line.
As a result, DOGE shattered the $0.070-to-$0.087 support area, flipping it into a resistance barrier. Interestingly, the Dogecoin price came close to retesting the $0.048 foothold but failed as buyers stepped in.
While the overall outlook of the market is still drenched in a bearish bias, the Momentum Reversal Indicator (MRI) seems to have come alive and hints at a potential reversal. The green ‘one’ buy signal on the weekly chart by the MRI, forecasts a one-to-four candlestick upswing for DOGE.
Although investors might be unsure, this signal has been accurate to the T, the last few times it popped up.
For example, the bull run top was signaled by a red ‘one’ down arrow by the MRI on May 10, which was followed by a 90% crash. The exponential rally in late 2020 was also marked by a top signal, which led to a 31% downswing.
The last time this indicator flashed a green ‘one’ buy signal, the Dogecoin price rallied 445% in two months or so.
Therefore, investors need to be cautiously optimistic about this buy signal for the Dogecoin price. If this truly is the bottom, then DOGE could rally 81% to $0.109 before facing a sell-off.
DOGE/USDT 1-week chart
On the other hand, if the Dogecoin price produces a weekly candlestick close below $0.048, it will create a lower low and signal the continuation of a downtrend.
Additionally, this move would also flip the said level into a resistance barrier and invalidate the bullish thesis and the MRI’s buy signal for DOGE. In such a case, Dogecoin price could crash 60% to fill the price inefficiency or Fair Value Gap (FVG), extending from $0.041 to $0.014.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
XRP eyes $0.6640 as Ripple CEO tips Trump to fire Gensler on first day in office
Ripple's XRP is up over 5% on Wednesday and could extend its rally to $0.6640 as the Securities & Exchange Commission may not file its appeal brief against the company due to Donald Trump's presidential election victory.
What's next for Bitcoin and Crypto industry following Trump's victory in US Presidential election
The 2024 US presidential election ended with pro-crypto advocates leading the House of Representatives, the Senate, and Donald Trump as the president-elect. The results stirred massive celebration across the crypto industry, with Bitcoin and the crypto market rallying following Trump's win.
Crypto Today: All Bitcoin holders in profit, TRON partners with Chainlink, DOGE miners in $145M buying spree
Bitcoin price reached a new all-time high of $75,120 on November 6 as markets reacted to Donald Trump’s victory in the 2024 US presidential election. The global cryptocurrency sector valuation grew by $190 billion within the daily time frame as bullish momentum spilled over into the altcoin market.
Coinbase’s Paul Grewal urges SEC to embrace change on crypto after Trump's victory
Paul Grewal, Coinbase's Chief Legal Officer, has asked the US Securities & Exchange Commission to reconsider how it regulates cryptocurrencies now that Donald Trump has been elected to a second term as president.
Bitcoin: New all-time high at $78,900 looks feasible
Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.