By Franklin Smith
Dogecoin price sustained massive declines since hitting its ATH in May 2021. However, the retracement phase could be a blessing in disguise as it printed a popular bullish pattern that presents the potential of an upcoming bullish rally for Dogecoin.
Dogecoin Price Contemplates Breakouts
Dogecoin saw its price losing a staggering 85% from the $0.740 all-time high recorded in May’s first week. The resulting plummet created a base near $0.109 in February’s final week. The successive months of downside slides continued for almost a year, even with most altcoins rallying.
The weekly crashes formed three unique lower lows and lower highs, revealing a declining wedge setup when connected with trend lines. This technical pattern predicts a 68% surge toward $0.241, determined by adding the initial swing high to low distance to the breakout level.
Though last week’s sessions saw Dogecoin price breaching the topside trend line, it could not sustain the momentum. Nevertheless, the crypto nearly erased the 23% gains, and Dogecoin trades near $0.130 at this publication.
Presuming Bitcoin forms a bottom and reverses, alternative tokens, including Dogecoin, will mimic the move. Such developments can see the original meme coin on an impressive breakout past the declining wedge’s top trend-line near $0.143.
That might catalyze a 68% run-up for DOGE to $0.241. Meanwhile, that would mean an 88% uptrend from the token’s current position. Thus, patient market players may capitalize on this move.
Though the Dogecoin price outlook appears sluggish, the 365-day MVRV model presents a bullish narrative. This metric shows profits or losses by investors that bought the token within the previous year.
A negative reading shows investors are underwater, while a positive one suggests profits for holders. The latter heightened sell-off probability, thus not a lucrative moment for accumulation.
Santiment’s brackets suggest values between -10% and -15% show near term holders in losses. Meanwhile, long-term investors accumulate amid these conditions. The area, dubbed an opportunity zone, has fewer sell-off risks.
Dogecoin has the 365-day MVRV hovering near -38%, a lucrative accumulation level for long-term traders as near-term holders remain underwater. Therefore, DOGE has a higher probability of forming a base around its current price region, matching the technical standpoint’s outlook for the meme token.