Dogecoin (DOGE) continues its rebound move four weeks after bottoming near $0.10 and is now promising more upside moves in Q2/2022.
Dogecoin price nears two-month highs
DOGE’s price had risen by nearly 6.5% week-to-date to $0.15 a token. The coin’s recent gains surfaced after Elon Musk disclosed his $3-billion stake in Twitter on April 4, reiterating his influence on its market.
Musk has been a big supporter of the Dogecoin community, including his decision to accept DOGE payments at his company Tesla’s online merchandise store.
As Cointelegraph reported, Musk’s investment could help push Twitter’s crypto initiatives forward and even see DOGE integration on the social media platform.
— Ran NeuNer (@cryptomanran) April 4, 2022
DOGE’s falling wedge breakout underway
Musk’s Twitter investment also assisted Dogecoin in breaking out of a falling wedge pattern.
In detail, falling wedges are considered bullish reversal setups and appear when the price consolidates lower inside a range defined by two converging, descending trendlines while leaving behind a trail of lower highs and lower lows.
In a perfect scenario, falling wedges resolve after the price breaks decisively above their upper trendline. As it happens, traders typically eye a run-up toward the level that comes to be at length equal to the maximum distance between the wedge’s upper and lower trendline.
As DOGE’s price undergoes a similar pattern, its likelihood of continuing its uptrend has increased following the break above the trendline on April 4. Therefore, the coin now eyes a run-up towards $0.37, about 150% above April 5’s price, as shown in the chart below.
DOGE/USD weekly price chart with falling wedge’ pattern. Source: TradingView
DOGE price downside risks
Nonetheless, the bullish setup comes with downside risks. Notably, Dogecoin’s breakout move above the falling wedge’s upper trendline accompanies weaker volumes, suggesting that traders lack conviction in the rally.
Related: What Elon Musk’s investment could mean for Twitter’s crypto plans