Dogecoin price on the verge of a 70% breakout, suggests trading veteran

2021-02-16 08:00:00

  • Dogecoin has formed a classic cup-and-handle bullish pattern, ready for another upswing.
  • Support at the 50 SMA on the 4-hour chart must be guarded to secure the uptrend.
  • The IOMAP shines a light on the challenging resistance ahead of DOGE, which may delay the uptrend.

Dogecoin is holding above key support following correction from the all-time high at $0.088. The ‘Meme Coin’ is trading at $0.058, as bulls fight to resume control. Peter Brandt, a renowned trader, has suggested in his latest analysis that the DOGE is primed for a massive 70% upswing to $0.143.

Dogecoin technical levels flipping bullish

DOGE has formed a classic cup-and-handle pattern on the 4-hour chart. The technical pattern is regarded as a bullish signal whereby the right-hand side goes through a period of low trading volume. The cup-and-handle pattern can form both in short and long timeframes.

When properly timed, this pattern offers excellent entry positions. It is confirmed as the handle reaches maturity, which is marked by low trading volume. A breakout comes into the picture when the volume starts to increase, leading to a retest of the previous high.

DOGE/USD 4-hour chart

The same 4-hour chart shows Dogecoin trading above the 100 Simple Moving Average (SMA). If this support remains intact, bulls will have the opportunity to focus on breaking the near-term 50 SMA resistance. Trading above this critical level could jumpstart the rally to highs above $0.1 and set Dogecoin on the path towards $0.143.

Looking at the other side of the fence

The IOMAP model developed by IntoTheBlock, a leading on-chain analysis platform, highlights rising selling pressure, especially in the region between $0.058 and $0.06. Here, nearly 36,000 addresses had bought roughly 5.6 billion DOGE. Slicing through this level might be an uphill task.

Dogecoin IOMAP chart

Dogecoin IOMAP chart

On the downside, robust support exists to ensure that losses are stopped. For instance, the most significant buyer congestion zone lies between $0.053 and $0.055. Here, nearly 1,700 addresses had previously bought 3.4 billion DOGE. The model generally shows that consolidation will take precedence before the breakout mentioned above comes into the picture.

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