Throughout the previous week, a number of meme-based cryptocurrencies experienced notable declines. Notably, Dogecoin [DOGE] was one of them, facing a decrease of 12.4%.
Conversely, in the recent 24-hour period, DOGE managed to secure some modest gains on the trading charts. Presently, Dogecoin is valued at $0.109.
Unquestionably, the current price movements of this memecoin have generated a buzz among cryptocurrency analysts. Among them is Kevin Capital, who has shared insights pointing to a potential upward trend, referencing the overarching declining wedge pattern.
Assessment of Dogecoin’s Market Sentiment
In Kevin’s evaluation, he suggests that Dogecoin’s recent price fluctuations are hinting at a probable bullish recovery following a recent surge above the overarching falling wedge pattern within the past 48 hours.
Based on this assessment, the recovery in the last 48 hours indicates that the previous breakdown might have been a misleading bearish signal, and DOGE could now be undergoing a bullish reevaluation. An effective reevaluation would confirm that the trendline of the wedge is acting as a supportive factor, triggering an upward breakout.
Typically, a declining wedge indicates a bullish reversal pattern, usually manifesting during a downtrend. This pattern suggests that the selling pressure is diminishing and a potential upward breakout is on the horizon.
Historically, emerging from this pattern is viewed as a bullish reversal, notably after a prolonged downtrend. Its formation signals a possible shift in favor of buyers.
As an example, in 2021, Dogecoin witnessed a remarkable surge amid the meme-fueled bull market. During this period, DOGE soared by 1333% within 2 days, reaching $0.0459. Subsequently, there was a bullish surge, propelling DOGE’s value by 10531% over 100 days, culminating in an all-time high of $0.70.
Thus, if this analysis proves accurate, DOGE has the potential to experience substantial price increases.
Interpreting the Chart Data
According to recent market conditions, Dogecoin seems poised for further advancements in the immediate future.
Initially, Dogecoin’s DyDx exchange funding rate has remained positive throughout the week.
This indicates that individuals holding long positions are compensating short position holders during market downturns to retain their positions. This market behavior reflects confidence in the memecoin’s future prospects.
This demand for long positions can be reinforced by a positive Open Interest (OI) weighted funding rate.
Moreover, the netflow of large holders has surged in the past week, escalating from a low of 37.43 million to 563.1 million. This surge indicates that numerous significant holders are expanding their investments and holdings, compared to those who are withdrawing for the purpose of selling. Such a trend showcases optimism among large holders as they anticipate further price hikes.
In essence, Dogecoin is currently benefiting from a favorable market sentiment. Should these conditions persist, DOGE is poised to breach the resilient resistance level at $0.11105. An upward breakout from this level would propel the memecoin to $0.134.