Dogecoin Price Forms Symmetrical Triangle, Falling Wedge Breakout Begins From Oversold Zone

Dogecoin’s latest price formations suggest that an early-stage recovery might be underway, supported by signals on both short-term and mid-term timeframes. A close look at the chart activity shows technical setups that has historically led to strong breakouts. The observations come from crypto analyst Trader Tardigrade, who recently shared two updates based on patterns forming on the 1-hour and 4-hour candlestick charts.

Symmetrical Triangle Builds Quiet Momentum on 4-Hour Chart

Trader Tardigrade highlighted a symmetrical triangle forming on the 4-hour timeframe, with Dogecoin’s price gradually narrowing into the apex of the structure. While the movement appears indecisive on the surface, symmetrical triangles are known for building quiet volatility. 

In the case of Dogecoin, this symmetrical triangle has been playing out since April 8, and recently bounced off the lower trendline. According to the analyst, the longer the price continues to consolidate inside this triangle, the more momentum builds for an eventual breakout. If confirmed, this could mark the beginning of a sustained rally.

Falling Wedge Breakout And RSI Point To Positivity On 1-Hour Timeframe

As Dogecoin continues to trade in the symmetrical triangle on the 4-hour timeframe with the hopes of an upward breakout, another interesting price action is playing out on the daily candlestick timeframe chart. The focus shifts to the lower timeframe, where crypto analyst Trader Tardigrade identified a falling wedge breakout on the 1-hour chart in another analysis. More interestingly, the wedge breakout move coincided with a recovery from the oversold zone on the RSI indicator.

Falling wedges often serve as bullish reversal indicators, and the breakout from this formation is one of the first signs that Dogecoin might be preparing for a broader trend shift. The broader trend has been a bearish one for the past six weeks or so, and a trend shift will be a change into bullish momentum. The RSI bouncing from the oversold level further supports the case for growing bullish strength in the short term, although trading volume is still subdued for now.

Despite these promising price pattern, there is still a need for bullish confirmations. The symmetrical triangle’s upper boundary will need to be broken with a strong candlestick close and accompanying volume for the bullish case to take full shape. Speaking of trading volumes, trading volume is one of the means of confirming the strength of a breakout. A huge trading volume contributes to the prospect of a strong upside move. However, this wedge breakout hasn’t been accompanied by a strong surge trading volume, although the price action has increased by a few percentage points.

At the time of writing, Dogecoin is trading at $0.1557, up by 1.3% in the past 24 hours. Trading volume, on the other hand, is down by 4.7% in the same timeframe, coming out to $745 million.

Featured image from Adobe Stock, chart from Tradingview.com

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