1. Technical pattern replay: descending wedge breeds surge momentum
Dogecoin (DOGE) is replicating the most classic bullish pattern in history, the descending wedge, in its recent oscillating trend in the $0.16 range. On-chain analysis shows that the price of DOGE has formed a converging triangle in the $0.158-0.165 range for 12 consecutive trading days. Its morphological characteristics are highly similar to the technical structures before the two surges in April 2021 and October 2023:
Morphological features: the slope of the upper track is 12.3°, the slope of the lower track is 5.7°, forming a standard "convergent falling channel";
Volume coordination: The trading volume has shrunk by 38% in the past 5 trading days, which is consistent with the "volume shrinking and price stabilization" feature at the end of the wedge consolidation;
Historical backtesting: After the first two breakthroughs of this pattern, the average 30-day increase reached 217%, among which the historical high of US$0.73 was set after the breakthrough in April 2021.
Well-known analyst Trade Tardigrade pointed out on the X platform: "DOGE repeatedly builds a descending wedge at the support level. Historical data shows that after this pattern breaks through, there will be a main upward wave. Now is the layout window."
2. The critical point between long and short positions: $0.17 becomes a key battle
▶ Short-term breakthrough catalyst
Cryptocurrency analyst Ali Martinez gives a precise breakthrough model:
Price trigger point: Effective recovery of $0.17 (200 hour moving average position);
Confirmation signal: 3-day candlestick closes above $0.172, accompanied by volume expansion to 1.5 times the 5-day average;
Target calculation: The first target after the breakthrough is $0.21 (Fibonacci 61.8% extension level), corresponding to a market value of $28 billion.
▶ On-chain fund changes
Whale holdings: The number of addresses holding more than 1 billion DOGE increased by 7 last week, and the cumulative holdings reached 18.3% of the circulating supply;
Exchange traffic: Binance DOGE deposits fell 42% month-on-month, and withdrawals rose 27%, indicating that chips are flowing from exchanges to wallets;
Options data: Open interest in $0.20 call options surged 300%, with implied volatility rising to 68%.
3. Risk-return ratio assessment
✅ Bullish scenario (65% probability)
Trigger conditions: Musk X platform restarts DOGE payment function + US retail investors’ capital repatriation;
Technical target: $0.21 (short term) → $0.35 (medium term, 2023 high);
Catalyst tracking: Musk’s tweets on July 4, the US Independence Day, and DOGE-related data in the Q2 financial report of the X platform.
⚠️ Bearish risk (35% probability)
Breakdown signal: Loss of $0.155 (lower track of the wedge), stop loss immediately;
Macroeconomic suppression: The Fed’s July rate cut expectations were dashed + U.S. tech stocks pulled back;
Fund diversion: The approval of Bitcoin spot ETF has led to the withdrawal of funds from altcoins.
4. Trading Strategy Toolbox
Position management:
Before the breakthrough: 10% position ambush, the average cost price is 0.162 USD;
After the breakthrough: add 10% position, target $0.21, take profit of 50%, and the remaining position is $0.35.
Hedging solutions:
Buy a $0.20 put option, with the premium accounting for 3% of the position, to hedge against the risk of a breakout;
Configure a 1:3 DOGE/BTC hedging portfolio to balance the risks of mainstream coins and altcoins.
Dynamic tracking indicators:
Risk warning: DOGE is a highly volatile MEME coin, with the largest single-day drop in history reaching 42%. This analysis is based on technical pattern deduction and does not constitute investment advice. Investors need to strictly set stop losses, avoid leveraged trading, and participate with no more than 5% of their investment portfolio.
