The broader cryptocurrency market is experiencing some weekend relief following a sharp sell-off earlier in the week. This downturn had dragged Ethereum (ETH) down to $3069 before it managed to bounce back above the $3200 mark.
Following this bounce, Dogecoin (DOGE) has also shown modest gains, turning slightly green. However, what is more noteworthy than the current price action is a well-defined harmonic pattern forming on DOGE's chart, which suggests that a potential rebound could be in the making.
Bearish Gartley Pattern in Play?
On the 4-hour chart, DOGE appears to be shaping a Bearish Gartley harmonic pattern. This pattern is known for signaling potential reversal zones once its final leg, known as Point D, completes. Although labeled "bearish," this pattern often results in a temporary upside move toward the Potential Reversal Zone (PRZ) before the broader trend potentially resumes.
The formation of this pattern began at Point X, located near $0.20963. This was followed by a sharp decline into Point A, a subsequent relief bounce to Point B, and then another corrective move that brought DOGE down to Point C, around $0.15469. After touching this level, DOGE has shown early attempts to stabilize, currently consolidating around $0.16350 as traders await a clearer directional signal.
Adding to this technical setup, DOGE is also currently trading around the 50-hour moving average, which is situated near $0.17182. A successful breakout and sustained hold above this moving average would serve as an early confirmation that buyers are regaining momentum.
What's Next for DOGE?
For the bullish interpretation of this harmonic structure to remain valid, DOGE must hold above the $0.15469 support level at Point C. This point is a key level that anchors the entire pattern.
If buyers manage to reclaim the 50-hour moving average and sustain upward momentum, the Gartley pattern projects an upside move toward the Potential Reversal Zone (PRZ). This zone is identified between $0.19714 (corresponding to the 0.786 Fibonacci retracement level) and $0.20954 (corresponding to the 1.0 Fibonacci retracement level).
This PRZ aligns with the structural completion of Point D and suggests a potential 28% upside from current trading levels. This indicates that DOGE may be preparing for a significant rebound, provided that broader market conditions remain stable.
However, caution is advised. The pattern is still in the mid-formation stage, and any decisive break below Point C ($0.15469) would invalidate the structure. Such a break would open the door for further downside movement before a stronger recovery base could emerge.