Why Dogecoin [DOGE] price is likely to retrace before a potential 50% run-up

Dogecoin price is slowing down as it approaches a resistance level after hitting its target. This confluence combined with investors booking profit is likely to trigger DOGE to pull back to stable support levels.

Meme coins at discounted price

Dogecoin price crashed nearly 85% from its all-time high and is currently hovering around $0.16. The price action of this dog-themed crypto from 29 September, 2021, to 23 March, formed three distinctive lower highs and lower lows. Connecting these swing points using trend lines reveals a falling wedge pattern.

This technical formation forecasts a 34% upswing, obtained by adding the distance between the first swing high and swing low to the breakout point. The breakout occurred on 24 March at roughly $0.130, which puts the target at $0.178.

Due to the increase in volatility, the Dogecoin price managed to tag the aforementioned target but failed to maintain its momentum. As a result, DOGE began its corrective move. So far, DOGE has dropped to $0.16 and from the looks of it, there is more pullback yet to come.

The stable support level at $0.14 seems like the best option to absorb the selling pressure while allowing sidelined buyers to scoop up DOGE at a discounted price. Such a development is likely to trigger a bull rally for the Dogecoin price that propels it to $0.178;  in a highly bullish case, the $0.216 hurdle.

Put together, this upswing would constitute a 50% gain and is likely where the upside for Dogecoin price is capped. Therefore, patient buyers will have more to gain by waiting for a perfect retest.

Supporting the bullish move for Dogecoin price is the recent spike in on-chain volume from 689 million to 5.95 billion in the last three days. This explosive uptick in on-chain volume indicates that there is massive interest from investors for Dogecoin price at the current levels.

Therefore, capital could be flowing into the DOGE blockchain and might be hinting that a massive uptrend for DOGE is around the corner.

On-chain volumes | Source: Santiment

Regardless of the bullish outlook for Dogecoin price from both technical and on-chain standpoint, a daily candlestick close below the $0.124 resistance barrier will invalidate the bullish thesis for DOGE and trigger a massive correction to $0.085.