- Dogecoin price activates the cup-with-handle pattern today with trade above the handle high of $0.288.
- DOGE is on pace to close with the fourth consecutive positive month, demonstrating a newfound commitment and emotion for the meme token.
- The cup high of $0.291 proves to be tough resistance for the rally continuation.
Dogecoin price orchestrated a 28.14% gain on August 7 and climbed over 40% at the August 8 high of $0.288, busting the tight range that defined DOGE through late July and the beginning of August. The resulting improvement in the price structure, taking the form of a cup-with-handle base, has created the opportunity for higher prices and the beginning of a new cyclical uptrend.
Dogecoin price symmetry takes a hit
The test of the June 25 high of $0.291 in August was a milestone for Dogecoin price, confirming a break from the multi-month DOGE downtrend with a decisive close above the 50-day simple moving average (SMA) at $0.216 and establishing the right side of the cup-with-handle base.
The measured move of the DOGE cup-with-handle base is 40%, suggesting a price target of $0.406. The target falls short of the 50% retracement of the May-July correction at $0.457 and the June high of $0.463.
Today’s attempted DOGE breakout above the handle high of $0.288 and the June 25 high of $0.291 was met with selling pressure, driving Dogecoin price back into the handle. It is not a surprise due to the lack of symmetry in the duration of the handle relative to the cup. Simply, the DOGE breakout came too soon, preventing the price compression generated by the August 7-8 spike higher from being removed.
Moving forward, the DOGE breakout now has four sessions to close above today’s high of $0.295. If not, it would increase the probabilities for a deeper correction, potentially to the flattening 50-day SMA at $0.216. The moving average currently aligns closely with the highs of the preceding range.
DOGE/USD daily chart
Improving the potential for the DOGE breakout is the bullish Golden Cross pattern on the six-hour chart that was triggered on August 10 when the 50 six-hour SMA crossed above the 200 six-hour SMA. The previous Golden Cross occurred at the beginning of April before Dogecoin price ignited to the upside.
DOGE/USD 6-hour chart
The bullish narrative would be defeated by a daily close below the 50-day SMA. Dogecoin price would immediately fall to the 200-day SMA at $0.205 or the May 19 low of $0.195. If DOGE logs a daily close below the August 5 low of $0.181, the outlook for the cryptocurrency turns notably bearish and projects a test of the July low of $0.159.
Here, FXStreet's analysts evaluate where DOGE could be heading next as it seems poised to breakout.
