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Dogecoin price eyes 17% gain as DOGE reveals a bottoming structure

www.fxstreet.com 10 January 2022 05:34, UTC
Reading time: ~2 m

  • Dogecoin price is forming a bottoming structure around the $0.151 barrier, signaling an uptrend is near.
  • A recovery above the $0.151 support floor will trigger a 17% rally to the $0.176 resistance level.
  • A four-hour candlestick close below the $0.147 foothold will invalidate the bullish thesis.

Dogecoin price has been compounding its losses after it breached a crucial support level on January 5. However, the recent price action shows that DOGE is forming a bottom and will likely reverse the trend and kick-start an upswing.

Dogecoin price vies for a new high

Dogecoin price exhibited a fractal on January 3, which consisted of a failed triple bottom setup followed by a massive uptrend. However, this outlook failed to provide value as DOGE sliced through the $0.159 and $0.151 support floors, invalidating the fractal.

However, after breaching through the $0.151 support level, Dogecoin price has set a swing low at $0.147. Soon thereafter, DOGE set up another lower low, effectively collecting the liquidity and signaling a typical bottoming structure.

Therefore, investors can expect Dogecoin price to recover above the $0.151 and $0.159 barriers and make a 10% run for the $0.168 resistance barrier. In a bullish case, the market makers are likely to propel DOGE to sweep above the $0.176 hurdle to collect the buy-stop liquidity resting above it. 

DOGE/USDT 4-hour chart

DOGE/USDT 4-hour chart

Investors should note that the bottoming structure might see another swing low piercing the $0.147 support floor before the uptrend kick-starts. However, if DOGE produces a four-hour candlestick close below $0.147, it will invalidate the bullish thesis.

In this scenario, market participants can expect the Dogecoin price to crash 12% and revisit the $0.129 support level.

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