- Dogecoin forms a symmetrical triangle pattern as bears beat the drums for a significant downswing.
- Losing support at $0.24 will validate the expected correction to $0.17.
Dogecoin price has in the past week sustained the position above $0.24. The consolidation came into the picture after the hurdle at $0.27 became challenging to break. Moreover, Dogecoin’s upside is capped under the 50 Simple Moving Average (SMA) and the 100 SMA on the four-hour chart.
Dogecoin price breakdown to $0.17 could gain traction
The four-hour chart shows the formation of a symmetrical triangle pattern. The pattern is created by converging a couple of trend lines to link a series of sequential peaks and troughs. Generally, these trend lines cross at an approximately equal slope. The formation brings to light a period of consolidation ahead of either a breakout or a breakdown, as seen on Dogecoin’s chart.
It is essential to realize that a breakdown occurs from the ascending trendline and identifies the beginning of a downtrend. On the other hand, a breakout happens at the descending trendline and signifies the start of a bullish trend.
Symmetrical triangles tend to have precise price targets for the breakout or breakdown, equal to the distance between the widest points of the patterns. For instance, Dogecoin may be headed for a 30% breakdown to $0.17.
DOGE/USD four-hour chart
Looking at another side of the picture
The formation of a golden cross pattern in the exact timeframe hints at the invalidation of the retreat to $0.17. Realize that the golden cross comes into the picture when a 50-day moving average crosses above the longer-term 100 SMA.
Usually, in a downward market, the 50 SMA trails below the 200 SMA. As the low pressure fades, the short-term moving average crosses above the longer-term moving average, identifying the impending flip from bearish to bullish.
While the golden cross does not signify entry positions or targets, it tells the trader to be on the lookout for entry points. Hence, if the support at $0.24 is secured and Dogecoin is given a slight push, the recovery heading to $0.3 may gain momentum.
The sideways price action has also been reinforced by the Moving Average Convergence (MACD). Although this technical pattern sends out bearish and bullish signals, it currently is leveling at the zero line (0.00). In other words, the stalemate in the market may hold for much longer.