Dogecoin seeks technical recovery with megaphone pattern and support from index funds

The currency remains at critical levels

Dogecoin (DOGE) is currently trading at $0.14, facing a significant correction after retreating from its all-time high of $0.73. The token has experienced substantial selling pressure on the weekly timeframe, where investors are closely monitoring key technical levels that could determine the next price movement.

Megaphone pattern: the formation that anticipates a change

Technical analysis reveals that DOGE is strategically positioned within a structure known as a megaphone pattern on the weekly chart. This formation, characterized by a progressive divergence between supports and resistances, has historically preceded sustained bullish movements. The price remains just above the lower containment barrier of the pattern, a level where Dogecoin has repeatedly found rebound opportunities in the past.

The significance of this position lies in the fact that an upward breakout from this megaphone pattern could trigger a substantial technical move. Pattern analysis specialists observe that this type of formation often precedes notable recoveries.

Elliott anticipates bullish phases ahead

Elliott Wave analysis provides an additional framework to assess the coin’s potential. According to this technical approach, Dogecoin has completed the initial phases (AB, BC, and CD) of a broader cycle and would be starting the DE phase. If this scenario is confirmed, the immediate technical target would be the $0.3068 level, equivalent to the high reached in September, representing a 117% gain from the current quote.

A break of this initial barrier would lead traders to watch the previous high at $0.4788, implying a 235% appreciation from current levels. However, it is important to note that these movements are projected on a weekly chart, suggesting that their development would require several weeks of consolidation.

Index fund flows gain momentum

Dogecoin-backed exchange-traded funds (ETF) have shown strengthening in capital inflows over recent weeks. Market data indicates that these products added approximately $1.94 million in new funds during the past week, continuing the inflow trend that totaled $2.59 million in the previous period.

On a monthly basis, accumulated inflows reached $4.23 million, marking the largest monthly increase recorded for these funds. The total capital volume in these ETFs exceeds $4.64 million, raising net assets under management to figures above $10.16 million. Although this amount represents only 0.04% of Dogecoin’s total market capitalization, the growing inflow trend suggests renewed institutional interest.

Technical scenarios to watch

A downward break below the lower level of the megaphone pattern could invalidate the bullish scenario projected by Elliott, indicating possible additional selling pressures. Conversely, consolidation above this technical support combined with inflows into ETFs could provide the necessary momentum for the recovery movement anticipated by technical analysts.