The hard correction seen in the Dogecoin (DOGE) market between May 2021 and February 2022, when the price dropped nearly 85%, appears to have stalled this month.

DOGE/USD returns 30% in two weeks
DOGE saw strong bearish buying when the price crashed to around $0.10 two weeks ago, resulting in a 30% drop to $0.14 as of March 27. Setting up a wedge indicating an extended bullish reversal in the upcoming weekly sessions.

In detail, a falling wedge pattern occurs when price trends fall as they oscillate between two downward slopes converging from trendlines. In an ideal scenario, the chart would result in price breaking out of the downside zone, rising to the maximum distance between the upper and lower trend lines of the wedge.

DOGE/USD weekly price chart in the Falling Wedge pattern. Source: Trading View
The rise of DOGE from the lower trendline of the wedge two weeks ago opens the possibility of a continuation of the uptrend towards the upper trendline around $0.18. Thus, a break of the upper trend line would see the price of Dogecoin rise to $0.37, which is more than 150% higher than the current price.

THE DANGER OF DOJ
Veteran investor Tom Bolkowski considers the falling wedge to be a “poor performer” when it comes to predicting bullish chart patterns, noting that “the break-even point dip is high and the average price is low.” He cites a study of 800 trades that shows that the probability of a falling wedge hitting its bullish target is close to 62%.

Additionally, Dogecoin’s period of very positive correlation with Bitcoin (BTC) – from 0.94 vs. a perfect 1 result as of March 27 – could also limit its bullish bias if the latter declines due to the ongoing macroeconomic and geopolitical press.

Correlation coefficient between DOGE/USD and BTC/USD. Source: Trading View
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Cape McGlone, chief commodities strategist at Bloomberg Intelligence, indicated that bitcoin could fall to $30,000 due to its strong correlation with the US stock market. However, he stated that the price of BTC will recover from the bearish drop to the $100,000 target in the long term.

DOGE price levels to look out for next time
The recent rebound of Dogecoin is now showing a rapid rise to the $0.15-$0.19 range, an area with three levels of psychological resistance: 20-day EMA (20-day EMA; green wave), 50-day EMA (red wave). ) and the 0.618 Fibonacci line (around $0.19) on the Fibonacci retracement chart, all of which are shown in the chart below.

Daily DOGE/USD chart. Source: Trading View
A strong pullback followed by more volume from the aforementioned resistance area could see DOGE testing the 0.786 Fibonacci line near $0.10 as a temporary bearish target. Conversely, a decisive pullback back into the area could see bullish momentum extend towards $0.24 with $0.30 and $0.37 set (also a falling wedge target).

Source: CoinTelegraph

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