DOGE price action has certainly been on the downswing of late. Fears that a capitulation price move is about to begin are well-founded, but follow-through by DOGE bears has yet to occur.

Dogecoin price develops powerful bullish reversal patterns

Dogecoin is overwhelmingly bearish on its daily Ichimoku price chart. However, that Dogecoin trend will likely find a violent reversal or a robust price corrective move very soon. The primary reason for this reversal pattern, on the candlestick chart, is the presence of a falling wedge pattern.

Out of all the standard geometric patterns in technical price analysis (specifically Japanese candlesticks), wedge patterns have the highest positive expectancy ratio of turning into profitable trade volume setups. Wedge patterns define an extreme overbought/oversold market and represent excess. A price rising wedge is a bearish reversal pattern, and a falling wedge is a bullish reversal pattern.

Dogecoin price is right up against the lower trendline of a falling wedge. DOGE price is trading at these extremes while creating max mean support levels between the daily close and the Kijun-Sen, warning of a mean reversion price move higher.

On the $0.005/3-box reversal Point and Figure price chart, Dogecoin has developed a Bullish price Shakeout pattern. This candlestick pattern is only valid if an instrument is in a broader uptrend and at the bottom of a price corrective move – both of which are true for Dogecoin. The combination of the falling wedge and the Bullish price Shakeout pattern present a theoretical low risk, high reward trade volume setup.

The theoretical long trade volume setup for Dogecoin price is a buy stop order at price of $0.17, a stop-loss order at price of $0.15, and a profit target at price of $0.28. This possible trade volume setup represents a 5.5:1 reward/risk setup with an implied profit target of nearly 69% from the entry. In addition, a trailing stop loss of two to three boxes would help protect any profit made post entry.

Investers will want to watch for any sustained move below the falling wedge lower trendline level that would result in at least three days of closes below the lower trendline pattern. That would invalidate this analysis's theoretical long buy setup and bullish outlook.

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