Dogecoin (DOGE) reveals the prospect of present process a robust worth rebound after reaching a technical help confluence on Could 12.

DOGE worth 25% bounce incoming?

DOGE’s 45% worth drop to $0.065 this week, or a 90% decline from its report excessive of $0.76 a yr in the past, was met with first rate shopping for sentiment. Consequently, the token underwent a modest worth rebound on Could 12, rising over 10% to $0.078.

Curiously, Dogecoin’s upside retracement move began close to a confluence of two help ranges: a multi-month downward sloping trendline and a horizontal line that preceded a 335% worth rally within the week ending April 19 final yr.

DOGE/USD weekly worth chart. Supply: TradingView

In the meantime, the falling trendline is part of a broader descending channel pattern. Its a number of retests as help within the final 12 months propelled DOGE’s worth towards the channel’s higher trendline. If the sample repeats, Dogecoin’s rebound will stretch towards the higher trendline close to $0.10, up nearly 25% from Could 12’s worth.

DOGE/USD weekly worth chart that includes ‘descending channel’ setup. Supply: TradingView

The upside setup additionally picks cues from Dogecoin’s every day relative energy index (RSI), now close to its oversold threshold of 30 — a purchase sign.

Conversely, a decisive transfer beneath the confluence help dangers sending DOGE to $0.04, which has served as a robust help stage within the February–April 2021 session. That might imply another 40% price decline earlier than the following potential rebound.

Elon Musk vs. Federal Reserve

The most recent bout of promoting within the Dogecoin market coincides with comparable sentiment within the general crypto and conventional markets, led by the Federal Reserve’s decision to tighten monetary policy aggressively to curb rising inflation.

Dogecoin, very like its top-ranking rivals Bitcoin (BTC) and Ether (ETH), has additionally been hit by the panic across the depegging of two popular stablecoins: TerraUSD (UST) and Tether (USDT).

As DOGE holds above its technical help ranges, its subsequent potential bull case is none aside from Tesla CEO Elon Musk.

The billionaire investor, who has emerged as some of the celebrated Dogecoin backers, lately bought Twitter for $44 billion. Earlier than the acquisition, he had instructed that the Twitter board begin accepting DOGE as funds for his or her first-ever subscription service Twitter Blue.

Twitter has not revealed any plans to make use of DOGE for funds. However the prospect of it occurring may put a worth flooring beneath the token within the coming weeks.

The views and opinions expressed listed here are solely these of the writer and don’t essentially replicate the views of Cointelegraph.com. Each funding and buying and selling transfer entails danger, you need to conduct your individual analysis when making a call.