Dogecoin Forms Bullish Harami Pattern After Downtrend, Setting Stage for Potential Price Reversal

Dogecoin is showing signs of a potential early-stage reversal after forming a Bullish Harami pattern following a downtrend.

The price is currently holding above $0.20 with stable volume, suggesting renewed buying interest near recent lows. Notably, over 818,000 DOGE have been added to portfolios as the market retests support and flips key trendlines.

Dogecoin's latest daily candle closed exhibiting a variation of the Bullish Harami pattern. This pattern, typically observed after a downtrend, consists of a large bearish candle followed by a smaller bullish candle contained within its range. In the context of cryptocurrency, the gapped-up formation is not a strict requirement due to continuous trading.

Bullish Harami Pattern Forms After Prolonged Downward Movement

According to analysis from Trader Tardigrade, Dogecoin has printed a Bullish Harami variation on its daily chart. This pattern emerged after a multi-day downtrend observed between July 27 and August 2.

The initial candle was a substantial red bar, succeeded by a smaller green candle that closed within the first candle's range. This technical formation often indicates a weakening of selling pressure alongside increased buyer activity.

The green candle on August 3 closed higher than the previous day's close, after Dogecoin reached a low near $0.19 before reversing. The pattern formed within a 24-hour range of $0.1959 to $0.2038. The daily closing price settled at $0.2021, representing a 3.0% increase.

Market Structure Holds as Price Recovers Above Support

According to CoinGecko data, Dogecoin's market capitalization has reached $30.38 billion. Trading volume in the last 24 hours stood at $1.43 billion, while the coin’s circulating supply remains steady at 150.36 billion tokens. Buying activity remained stable throughout the day, with price action maintaining its position above the $0.20 support level.

Source: Chris(X)

Observations by Chris indicate that Dogecoin recently retested the bull market support band and successfully flipped the downtrend line into support. According to Chris, “This might have just been the ultimate shakeout before the real fun up.” As mentioned previously, market participants have collectively added over 818,000 DOGE to their portfolios.

Analysts often interpret the Bullish Harami as an early indication of a potential reversal. However, further confirmation through continued price appreciation is generally considered necessary. While volume data during the pattern formation was not specifically shared, increased buying activity on the second day could bolster the pattern's potential to establish a base for an upward move.