Dogecoin (DOGE), which reached a technical support confluence in May 12, shows the potential for a strong price rebound.
Do you want to see the DOGE price bounce 25% incoming?
The DOGE price drop of 45% to $0.065 this Week, which is a 90% decrease from the record high of $0.76 last year, was well received by decent buyers. The token saw a slight price rebound on May 12, with a rise of over 10% to $0.078.
Dogecoin’s upside movement was triggered by a convergence of two support levels. One is a multi-monthly downward trendline, and the other is a horizontal line. This line preceded a 335% price rise in the week ending April 19, last year.
Weekly price chart for DOGE/USD Source: TradingView
The falling trendline is part a wider descending channel pattern. DOGE’s price climbed to the upper trendline due to its multiple support retests over the past 12 months. Dogecoin’s rebound could continue if the pattern is repeated, reaching $0.10 or higher, almost 25% more than the price on May 12.
Weekly price chart for DOGE/USD with a ‘descending channel” setup. Source: TradingView
The upside setup also takes cues from Dogecoin’s daily relative strength indicator (RSI), which is now close to its oversold threshold (30 — a buy signal).
A decisive move below confluence support could send DOGE to $0.04 (which has been a strong support level during the February-April 2021 session). This would lead to a further 40% decline in prices before any potential rebound.
Elon Musk vs. Federal Reserve
The recent selling in the Dogecoin markets coincides with similar sentiments in the crypto and traditional markets. This is due to the Federal Reserve’s decision not to relax monetary policy aggressively in an effort to reduce rising inflation.
Dogecoin has been affected by panic over the depeggings of Tether (USDT) and TerraUSD (UST), just like its top-ranking competitors Bitcoin (BTC).
2/2… widespread adoption of #cryptos, not only to trade but also for everyday transactions for goods and services. Keep an eye on #Tether, the largest stablecoin. $USDT dropped to $0.95 overnight and is now back at $0.99. $BTC $ETH
— DataTrek Research (@DataTrekMB May 12, 2022
DOGE is holding above its technical support levels and Tesla CEO Elon Musk is its next potential bull case.
He is a billionaire investor who has been lauded as one of the most prominent Dogecoin backers. Twitter was recently purchased by him for $44 billion. He had proposed to the Twitter board that DOGE be accepted as payment for their first subscription service, Twitter Blue.
#ElonMusk bought twitter I believe #Dogecoin will profit from it
— Yuriy_Bishko, April 26, 2022 (@YuriyBishko).
Twitter has not announced any plans to use DOGE as a payment method. However, the possibility of it happening could place a price floor below DOGE in the coming weeks.
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