During the previous week, several meme-based cryptocurrencies experienced notable declines in value. Dogecoin [DOGE] was one of these, witnessing a decrease of 12.4%.
Conversely, DOGE displayed some modest gains in the last 24 hours. Presently, Dogecoin is being traded at $0.109.
The ongoing price movements of this memecoin have attracted attention from various cryptocurrency analysts. Among them is Kevin Capital, who anticipates upward potential for DOGE based on the overall macro falling wedge pattern.
Sentiment in the Dogecoin Market
In his evaluation, Kevin put forth the notion that recent price actions in Dogecoin indicate a possible bullish recovery, having breached the macro falling wedge trend within the last 48 hours.
Insights suggest that the 48-hour recovery may suggest that the recent decline was a false bearish indication, leading to a positive retesting phase for DOGE. A successful retest could confirm the wedge’s trendline as a support, potentially triggering an upwards breakout.
A falling wedge typically signifies a bullish reversal trend that emerges during a downtrend. This pattern suggests that the selling pressure is diminishing, hinting at a potential upward breakout in the near future.
Traditionally, a breakout from this pattern denotes a bullish reversal, especially after a prolonged downtrend, indicating a shift in control towards buyers.
For instance, in 2021, Dogecoin experienced a rapid surge during what is known as the meme-fueled bull market. During this period, DOGE surged by 1333% in just 2 days, reaching $0.0459. This surge was followed by a remarkable uptrend, with DOGE skyrocketing by 10531% over 100 days, hitting an all-time high of $0.70.
Therefore, if this analysis is accurate, Dogecoin is poised to make substantial strides on the price charts.
Analysis of Market Trends
Based on the existing market conditions, Dogecoin appears to be primed for further growth in the short term.
Notably, Dogecoin’s DyDx exchange funding rate has maintained positivity throughout the previous week.
This indicates that long position holders are willing to pay shorts to uphold their positions during market downturns, reflecting confidence in the memecoin’s future prospects.
This inclination towards long positions is reinforced by an optimistic Open Interest (OI) weighted funding rate.
Besides, there has been a significant spike in the netflow of large holders over the recent week, rising from 37.43 million to 563.1 million. This surge implies that numerous large holders are expanding their investments, suggesting confidence in potential price increases compared to those opting to sell. Such behavior signals optimism among major holders anticipating further appreciation in value.
To sum up, Dogecoin currently enjoys a favorable market sentiment. If prevailing conditions persist, a breakthrough above the challenging resistance level at $0.11105 is likely for DOGE. Surpassing this barrier could drive the memecoin towards $0.134.