Dogecoin Support Area Could Be the Catalyst for a New Market Cycle

Dogecoin has been known as a very volatile cryptocurrency. However, while several other altcoins have posted double-digit increases/decreases, the DOGE price has been relatively stable since August 2019. Cryptocurrency enthusiast & trader @galaxybtc stated that this period of stability is coming to an end. Whenever the DOGE price falls inside a channel between 20-30 satoshis, it either does a fake breakdown followed by a pump or it goes straight to the pump.

$DOGE doesn't like this channel very much.

From here it's either fakeout and pump or just pump. pic.twitter.com/Ia8CNZPX3x

— Galaxy (@galaxyBTC) December 9, 2019

Since the Dogecoin price is inside this channel, he stated that he believes the price will initiate a strong pump — using the wordplay native to DOGE: “Such pump, much wow”. Will the DOGE price initiate an upward move and, if yes, how high will the price increase? Continue reading below if you are interested in finding out.

Dogecoin’s Support Channel

The support channel is found between 20 and 30 satoshis. The DOGE price has reached it five times until now — initiating an upward move each time. With the exception of November 2017, the weekly RSI also reached an oversold value whenever the price reached the channel. This is the case currently, increasing the possibility that an upward move will follow. We used a slightly different method to come to the same conclusion in one of our previous articles.

Inverse Head and Shoulders

Lower time-frames reveal a possible inverse head and shoulders that has been developing since May. While the pattern is irregular, mostly because of the difference in the height of the shoulders, it can still be considered as such. The descending resistance line acts as the neckline for the pattern. A price movement above it could cause a breakout and the beginning of the upward trend. This movement is supported by the possible bullish cross between the 100- and 200-day moving averages (MA). The DOGE price is attempting to use them as support and continue moving upwards. The initial target after the breakout would be at 45 satoshis. Finally, the pattern has been in place for roughly the same amount of time as the DOGE price has been consolidating inside the support area. To conclude, the DOGE price seems primed for an upward move. A strong breakout above the current descending resistance line would confirm that a new market cycle has begun.