Dogecoin Forms Diamond Bottom Reversal Pattern, Signals Potential Uptrend

Dogecoin (DOGE) is currently in the process of forming a “diamond bottom reversal” pattern, which suggests a potential shift from a recent downtrend to an uptrend. This pattern is often seen around the time of a price bottom, according to Trader Tardigrade, a popular technical analyst. The daily chart of Dogecoin appears to be forming this pattern, which could signal a new uptrend for the cryptocurrency.

Trader Tardigrade’s bullish outlook was supported by another trader, Galaxy, who noted that the Dogecoin price’s weekly chart has started to form higher highs and higher lows following its 2024 breakout from a 600-day accumulation period. Galaxy suggested that the uptrend for Dogecoin is not over and advised investors to keep it on their watchlist.

However, the current macroeconomic conditions are not favorable for a renewed altcoins/meme season. The US economic conditions remain highly uncertain, with risks of both higher unemployment and higher inflation, a scenario known as stagflation. In such an environment, risk assets like Dogecoin are not expected to perform well. Bitcoin, on the other hand, is looking strong and nearing a retest of $100,000, thanks to its growing narrative as “digital gold” and a safe haven.

Despite the unfavorable macro conditions, the favorable chart patterns for Dogecoin could suggest that a medium-term bottom is in for the cryptocurrency. If Bitcoin pushes back above $100,000 and towards a retest of its record highs around $108,000, the Dogecoin price could continue to recover. If it can break above $0.20 resistance, a move back to $0.28 would be on the cards.

For a new meme season to emerge, a significant positive catalyst is needed. This could be something like upside risks to US inflation subsiding, opening the door for significant rate cuts from the Fed. Altcoins/meme coins have historically thrived in times of easing financial conditions. Until then, the Dogecoin price is unlikely to see explosive moves to the upside. The current market environment should be viewed by crypto investors as a good time to steadily add to their DOGE bags.