Crypto Update: Dogecoin’s Bearishness Fogs Bullish Outlook
Dogecoin (DOGE/BTC) surprised many investors this year. The pair skyrocketed to 0.00000114 on January 7, 2018 from a low of 0.00000014 on December 8, 2017. The over 700% increase in less than a month made many investors euphoric. In financial trading, euphoria is the point of maximum risk. That was once again proven by Dogecoin as the cryptocurrency has been plummeting since.
Nevertheless, it appears that the current pullback is setting up the stage for a massive bull run. In this article, we show how Dogecoin’s bearish conditions fog an ultra bullish outlook.
Descending Triangle Poses a Threat
A quick look at the daily chart of DOGE/BTC reveals the threat of a descending triangle. So far, the market has managed to bounce each time it touches 0.00000036 support. However, the series of lower highs is applying tremendous pressure on 0.00000036.
Daily chart of DOGE/BTC
On top of that, the RSI generated two consecutive lower highs. This indicates a weakening market. Under these conditions, it is very likely that the bulls will not withstand the incoming bear rally.
Breakout Sinks the Market
If DOGE/BTC breaches 0.00000036 support, then it is most likely headed to its last support of 0.00000015. In other words, breakout from a descending triangle would mean losses of up to 60% for investors buying the market as of this writing.
Extended daily chart of DOGE/BTC
The good news is that DOGE/BTC has never broken support of 0.00000015. In fact, bulls have used this price area before to stage massive bull runs. That’s where the bullish outlook of DOGE/BTC begins.
Large Falling Wedge Offers Hope
Analysis of the weekly chart shows that DOGE/BTC is inside a large falling wedge pattern. This makes the descending triangle on the daily chart more likely. However, it also opens the possibility of a massive bullish breakout around 0.00000015 support.
Weekly chart of DOGE/BTC
0.00000015 is the price level where demand exceeds supply. DOGE/BTC would be a bargain at that price point and participants would likely take advantage of the situation. The three support lines converging around 0.00000015 give us a glimpse of the level of demand that can be expected.
Furthermore, a drop to this level would put the market in extreme oversold territory. The selling exhaustion coupled with extremely high demand could catalyze the breakout from the large falling wedge.
Breakout Catapults the Market
Breakout from the large falling wedge on the weekly chart sets DOGE/BTC on fire. The breakout would likely attract investors and traders who stayed on the sidelines during the bear run. The momentum that the breakout could generate may send the pair to as high as the 0.00000148 resistance level.
Projection of DOGE/BTC
A climb to 0.000000148 resistance would put the market in a very good position to break out from a double bottom pattern. Breakout from this pattern can take DOGE/BTC as high as 0.0000028. That’s an increase of over 1,760% from 0.00000015 support.
This is what we mean when we said that current bearish conditions hide an ultra bullish outlook.
DOGE/BTC may look unattractive to investors. However, technical analysis, from a long-term perspective, shows an ultra bullish sentiment. Should DOGE/BTC once again drop to 0.00000015, it can be the start of a bullish rampage.