Dogecoin Price Creates Inverse Head and Shoulders Formation Indicating a Swift Rally to $0.25

Dogecoin has entered a downward price trend over the past week, showing a decline of 6.11%. Nonetheless, this movement has given rise to a bullish signal on the 1-hour candlestick chart.

The favorable setup follows a corrective decline that briefly pushed Dogecoin to $0.215, yet recent trading patterns demonstrate ascending lows and stronger support levels. This development suggests an inverse head and shoulders pattern, indicating potential upward price targets for Dogecoin.

Analyst Identifies Inverse Head And Shoulders Pattern

Crypto analyst Klejdi Cuni shared a technical analysis on social media, pointing out an inverse head and shoulders formation on the DOGE/USDT pairing in the 1-hour timeframe. This configuration features three distinct dips, with the central dip being the most pronounced, occurring on May 25th. The right shoulder developed between May 23 and May 24, suggesting a possible short-term bullish shift.

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As noted by the analyst, this inverse head and shoulders is a smaller setup, making it particularly relevant for short-term traders aiming for quick profits. Currently, Dogecoin is completing its left shoulder, testing the neckline resistance at approximately $0.228. A breakout above this resistance level, supported by sufficient volume, may catalyze a rapid upward movement.

Short-Term Upside Targets For Dogecoin

Assuming the bullish inverse head and shoulders pattern develops as anticipated, the analyst forecasts a spike in Dogecoin’s price towards the $0.239 area. This level served as support for several hours on May 22, before breaking down and subsequently acting as resistance during a brief upward attempt on May 23. Therefore, this zone is crucial, as successfully surpassing it would unlock further targets.

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If Dogecoin clears the $0.239 hurdle, the next price target stands at $0.25. Although this seems modest in comparison to some long-term projections, it bears significance for a different reason. Reaching $0.25 would represent a full recovery to Dogecoin’s most recent peak from May and could indicate the beginning of an upward continuation towards $0.3 and higher levels.

The chart projection illustrates a stepwise progression where the breakout leads to immediate upward action, which may be followed by consolidation before another leg pushes Dogecoin to $0.25. Nonetheless, it’s critical to confirm any pattern. Failure to maintain the breakout region or if the price falls below the right shoulder, currently around $0.222, would diminish the bullish outlook and could result in a retracement to $0.21.

Presently, Dogecoin is trading at $0.2245.

Featured image from Getty Images, chart from Tradingview.com