Are these signals enough for Dogecoin price to rally 40%

Dogecoin price has been consolidating for the last five days, hinting at an explosive move. Since this development is occurring above a stable support level, there is a good chance the resulting breakout will propel DOGE higher.

Dogecoin price to move higher

Dogecoin price rose 45% from $0.065 to $0.095 and flipped above the $0.087 barrier. This development comes after DOGE crashed 50% since May 6. This recovery is likely to continue heading higher but this move will not be an easy one.

Since Dogecoin price is coiling up, a volatile move is what investors can expect. Considering that this range tightening is occurring above a stable support level, the chances of a bullish breakout are higher. 

Beyond a bullish breakout, the DOGE bulls need to slice through the $0.101 hurdle to head higher and retest the $0.125 target. This move would constitute a 40% upswing from the current position at $0.088.

DOGE/USDT 4-hour chart

Supporting this bullish outlook for Dogecoin price is the extremely oversold state of the 365-day Market Value to Realized Value (MVRV).

This on-chain metric is used to determine the average profit/loss of investors that purchased DOGE over the past year. Based on Santiment’s research, a value below -10% indicates that short-term holders are at a loss and are less likely to sell. 

More often than not, this is where long-term holders accumulate. Hence, any move below -15% is termed an “opportunity zone.” 

For DOGE, the 365-day MVRV is hovering at -58%, which is much lower than the March 2020 value at -38%. This value represents that a majority of the DOGE holders are underwater and are unlikely to sell. It also indicates that the dog-themed crypto is in a good accumulation position.

DOGE 365-day MVRV

A daily candlestick close below $0.062 will invalidate the bullish thesis for Dogecoin price by producing lower low. In such a case, DOGE could crash 25% to retest the immediate support level at $0.046.