Dogecoin price could rally 20% in July with this bullish reversal pattern

Dogecoin (DOGE), is ready to continue its rebound move in spite of the crypto bear market.

79% chance DOGE will extend its rebound movement

DOGE’s price appears to have been painting a “bump-and-run-reversal (BARR) bottom” since May 11, a technical pattern that points to extended trend reversals in a bear market. It is composed of three phases: Run, Bump, Lead-In.

The “Lead In phase” is when the price consolidates within a narrow, sideways range. This creates an interim bias conflict between investors.

This is the “Bump phase,” in which the price drops sharply and then recovers, leading to a price breakthrough, defined as the “Run phase.”

Daily DOGE/USD price chart with ‘BARR bottom’ pattern. Source: TradingView

Dogecoin seems to be in the Bump phase while awaiting a breakout above the BARR bottom’s falling trendline resistance. Let’s say DOGE breaches the price ceiling. As a rule, technical analysis would indicate that DOGE would then look for a rise towards the BARR’s origin levels.

DOGE’s current price is $0.0941. This puts DOGE’s value at over 20% higher than today. The upside target coincides with the token’s 50-week exponential moving mean (50-week EMA, blue line in chart below).

Weekly price chart for DOGE/USD with 50-week EMA. Source: TradingView

According to Thomas Bulkowski, a veteran investor, BARR bottom has achieved its profit target 79% of the time. The breakout stage of the pattern typically results in a 55% average rise. This means that DOGE has the potential to reach $0.123.

The DOGE price has reached its bottom?

Dogecoin’s rise to $0.0941 may not have allowed it to escape its bearish trend due to a number of fundamental and technical factors.

Technically, DOGE’s price risk runs into a “bulltrap” as it trend upwards (it has rallied nearly 60% in the past nine days). The coin’s downside bias is due to the “rising wedge”, pattern that appears on its lower-timeframe charts.

DOGE is in an uptrend within a range of two ascending and contracting trendlines. This makes DOGE a rising wedge.

This technical setup is usually bearish and leads to a reversal. It is confirmed when the price falls below the trendline.

It could happen that the price falls as far as the distance between the upper and lower trendlines of the wedge.

Four-hour DOGE/USD price chart with ‘rising wedge” setup Source: TradingView

DOGE’s rising wedge’s breakout points are within the $0.07-$0.08 area. If the wedge breakdown goes as planned, the token could drop to $0.05-$0.06 if it does, which would be a 15%-25% decrease from current prices.

Related: The worst bear market on record in 2022 — Glassnode

The Federal Reserve’s rate increases and reduction of its balance sheet to $9 trillion support the technical downbeat outlook in the short-to-medium term.

com. You should do your research before making any investment or trading decision.

Lillian Call

I am a technology and gaming writer by profession. I love NFT's and play to earn gaming such as Axie Infinity. I love writing about anything on the blockchain, especially gaming and entertainment. I often sing, write or draw to portray my feelings. When it comes to my free time or you can say ‘ME-TIME’, I love to play with my cat, sleep an extra hour, or play my favorite video games.