Dogecoin price has moved sideways this week as demand remained weak across the crypto industry. DOGE token was trading at $0.1116 on Wednesday, a few points below this month’s high of $0.1173.
Dogecoin Price Technical Analysis Points to a Surge
The daily chart reveals that the DOGE token price has formed some highly bullish technicals that may lead to more gains in the coming days or weeks.
It formed a double-bottom pattern at $0.0875 and a neckline at $0.1042, its highest point in March.
A closer look shows that the coin has formed a cup-and-handle pattern and is now in the handle section. It has moved above the 50-day Exponential Moving Average (EMA).
These patterns mean the biggest meme coin in the world will likely have a strong bullish breakout, potentially to the 200-day Exponential Moving Average at $0.1242.
Bitcoin Price Rising Wedge is a Major Risk
Still, Dogecoin price faces some major risks, including the fact that Bitcoin has formed the risky rising wedge.
The lower side of the wedge connects the lowest swings since April this year. Its upper side has connected the highest levels since March, and the two lines are nearing their confluence.
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The coin has moved below the lower side, a sign that the bearish breakout is happening. At the same time, the Relative Strength (RSI) has dropped from 68 to the current 55 and is pointing downwards.
Therefore, there is a risk that the coin will continue falling, potentially to the 50-day moving average level at $76,300. A move below that level will point to more downside, potentially to the key support at $70,000.
A Bitcoin price crash will likely lead to more downside among altcoins like Dogecoin because of the close correlation between the two assets.
Dogecoin has some other risks, including the fact that its spot ETFs have largely flopped. Spot Dogecoin ETFs have added just $1 million in assets this month, bringing the total assets to $14.2 million, a tiny amount for a crypto project with a market capitalization of over $17 billion.
Additionally, the Crypto Fear and Greed Index has remained stagnant at the neutral point at 47. In most cases, DOGE price does well when there is a sense of greed in the market.
There are two related reasons why the risk has jumped. First, US inflation has continued rising this year and is currently at 3.8%, while the producer price index has jumped to 6%. The rising inflation rate means that the Federal Reserve may not be in a hurry to hike interest rates.
Second, there is a risk that the US-Iran war will restart, which will push inflation higher for longer and lead to more volatility. DOGE price does well when there are no macro risks.
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