Bullish Descending Wedge Spotted In DOGE/BTC
BeInCrypto | Sep 17, 2019 07:31AM ET
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On June 26, the Dogecoin price reached a low of 24 satoshis. Shortly after it made an attempt at initiating an upward move, reaching a high of 44 satoshis on July 5. However, it immediately decreased and has been trading around 24 satoshis since the beginning of August.
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Will volatility return to the DOGE price or will it continue with its gradual decrease? Keep reading below if you want to find out.
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Dogecoin Price: Trends and Highlights for September 17
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- DOGE/BTC is trading below its weekly moving averages.
- DOGE is trading inside a descending wedge.
- A bullish divergence has developed in the RSI & MACD.
- There is resistance at 35 satoshis.
Long-Term Support
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A look at the weekly time-frame shows that DOGE has been decreasing since the beginning of April.
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The decrease has had a magnitude of 73 percent.
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Additionally, we can see two support areas, at 23 and 16 satoshis respectively.
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At the time of writing, the Dogecoin price was trading inside the first support area.
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A look at the weekly moving averages (MA) shows that the price has been in a downtrend for a long period of time.
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It is trading below both the 10- and 20-week MAs, facing very close resistance from the former.
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Additionally, the failed upward move in June ended as soon as the price reached the 20-day MA.
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This fact reiterates the strong resistance provided by the moving averages.
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Will DOGE be successful in initiating a reversal or will it decrease towards the second support area?
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Bullish Pattern
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Looking at the daily chart we can see that BTC has been trading inside a descending wedge since June 1.
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The Dogecoin price is approaching the end of the wedge, which is projected to be at the beginning of October.
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The descending wedge is considered a bullish pattern, making a price breakout more likely.
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Reversal Signs
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When we include the RSI and the MACD into the analysis we can see that DOGE has been showing clear signs of reversal.
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Both of them have been generating bullish divergence for the entire duration of the wedge.
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Divergence in the 3-day time-frame is uncommon.
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Combining this with the fact that it is occurring inside a bullish pattern makes us believe that a breakout is likely.
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Future Movement
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If a breakout occurs, an outline of possible future price movement is given below.
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Additionally, one resistance area is traced.
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Since the DOGE price is in a support area, it is likely to break out and reach the resistance area at 35 satoshis.
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However, it is possible that it first decreases towards the second support area before initiating an upward movement.
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However, due to the very significant bullish divergence, we believe this to be unlikely.
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Dogecoin Price Summary
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The DOGE price is trading inside a descending wedge.
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According to our analysis, it is likely to break out and reach the resistance area outlined above.
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For hypothetical trading purposes, DOGE may be a buy near the current price of 24 satoshis.
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