Dogecoin (DOGE) Price Prediction: Inverse Head and Shoulders Pattern Could Launch Memecoin 20% Higher

Dogecoin (CRYPTO: DOGE) prices saw some strength on Friday morning as technical traders noted a classic bullish reversal pattern forming on the 4-hour chart.

What Happened: Popular crypto analyst Trader Tardigrade, known on X as @TATrader_Alan, highlighted the inverse Head and Shoulders pattern that had emerged on the Dogecoin H4 chart.

This pattern is often used by traders to indicate a trend may be shifting from bearish to bullish and it comes at a time when the memecoin is showing some strength.

At the time of writing, DOGE was trading at $0.145, showing a 2.1% increase over the previous day’s market close of $0.142.

This price move was seen with an increase in volume of 15% as 1.2 billion DOGE traded, which is above the seven-day average of 1.04 billion, according to CoinGecko.

Related: How To Buy Dogecoin (DOGE)

Inverse Head and Shoulders Pattern: For technical traders, the inverse Head and Shoulders pattern shows three lower highs (the ‘heads’) and two higher lows (the ‘shoulders’).

The neckline is an area of support that connects the lows of the pattern. A break above the neckline can signal the continuation of the bullish trend.

According to Trader Tardigrade, if there is a break above the neckline with confirmation, then the projected target is around $0.174, which is about a 20% potential upside.

Key Chart Indicators: The H4 chart also showed key indicators in oversold territory, which could indicate the potential for a short-term bullish move.

The Relative Strength Index (RSI) was reading at 33.46 and the Stochastic Oscillator at 0.018. Both indicators are typically overbought when above 70 and oversold when below 30.

The MACD also showed a potential bullish crossover with the MACD line at -0.0003 and the Signal line at -0.0004. A MACD bullish crossover occurs when the MACD line trades above the Signal line.

This occurs during a downtrend and can indicate the potential for the trend to shift.

What Next: Traders will be watching closely to see if the pattern plays out as expected with a break and hold above the neckline.

A move in the U.S. dollar could play a factor in the near term as traders await the Consumer Price Index report for March.

The CPI report is expected to show a 0.3% month-over-month increase and a 3.5% year-over-year increase. A higher-than-expected reading could put pressure on the dollar and support cryptocurrencies.

The dollar was trading flat on Friday morning and a weaker dollar can support cryptocurrencies like Dogecoin as they are often seen as a hedge against inflation.

The DOGE/BTC pair also saw some slight strength on Friday morning, moving up 0.2% to trade at 0.0000023 BTC.

Bitcoin has been trading sideways and any strength in the benchmark crypto could put pressure on altcoins like Dogecoin.

Top traders often keep an eye on the broader crypto market trends and how different sectors may be rotating.

Earlier this week, a major A.I. firm unveiled a new large language model that can be used to improve trading algorithms. The news saw an increase in volume on Thursday for A.I. related tokens like SingularityNET (CRYPTO: AGIX) which saw a 3% bump in volume.

Fetch.AI (CRYPTO: FET) saw a 2.4% increase in volume on Thursday. Both tokens saw small gains of less than 1% on Friday morning.

While Dogecoin is not directly linked to the A.I. sector, the crypto markets often move in waves and any enthusiasm in one sector could spill over into other areas of the market.