At least three market catalysts suggest that Dogecoin (DOGE) could gain at least 50% by the end of the third quarter of 2022.
Falling wedge breakout in the race
Dogecoin has been charting a “falling wedge” pattern on its longer time frame charts since May 2021, suggesting a possible bullish reversal in the coming months.
A falling wedge occurs when the price trend is lower within the range defined by two descending converging trend lines. Their appearance coincides with a drop in trading volume, indicating that trading activity has slowed due to a narrowing price range.
An upward breakout of the wedge, coupled with increased volume, suggests that the asset is breaking out. As a rule of technical analysis, a falling wedge breakout can push the price up to the maximum distance between the upper and lower trend lines of the structure.
Applying classic theory to Dogecoin shows that if a breakout occurs near $0.14, or about 190% above today’s price, it will rise to $0.40.
In a worst-case scenario, a breakout of the falling wedge could see DOGE’s price rally just over 50% to $0.21 as it breaks out near a top around $0.75.
Elon Musk’s Twitter Acquisition
Earlier this week, Twitter announced that it had accepted Elon Musk’s $4 billion offer to buy its social media platform. The price of Dogecoin has reacted bullishly to the possibility of Musk integrating DOGE as one of the official payment mediums for his Twitter subscription service, according to his recent proposal to the company’s board of directors.
Noelle Acheson, director of market insights at Genesis Global Trading, noted that DOGE’s price increase was hinted at from “a lot of speculation,” as Musk still needs to confirm whether he will add a Dogecoin payment option to Twitter.
“But the possibility, even if it’s remote, is enough to get traders excited about the potential gains from DOGE adoption,” she told Bloomberg.
DOGE investors get excited
Musk’s Twitter acquisition announcement on April 25 and its subsequent positive impact on Dogecoin’s price rose nearly 20% on the same day, coinciding with a surge in retail and institutional interest.
For example, according to Google Trends, on April 25, internet queries for the keyword “buy Dogecoin” shot up by 392%. At the same time, the DOGE on-chain transaction volume worth more than $100,000 reached $2.59 billion that day.
“This is the highest volume since March 24, accounting for 94% of the total volume,” noted data analytics platform IntoTheBlock.
Crypto card service CryptoWallet also confirmed this in an emailed statement to Cointelegraph, noting that “as Musk took full ownership of Twitter, interest in buying Dogecoin online surged to nearly four percent of the average transaction volume in one day. times.”
Related: Dogecoin Jesus? Roger Ver resurfaces on Twitter in favor of DOGE over BTC
The price of DOGE fell more than 12% on April 26. Still, the declines coincided with lower volume than the previous day, suggesting less profit-taking sentiment.
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk and you should do your own research when making a decision.