- Dogecoin price is trading at a confluence consisting of the $0.0491 to $0.0578 demand zone and equal lows.
- Due to the nature of the existing support, buying pressure is in excess and could kick-start an explosive move to $0.089.
- A daily candlestick close below $0.0491 without a quick recovery will invalidate the bullish thesis.
Dogecoin price has collected liquidity resting below the equal lows, which pushed it into a demand zone. This development produces a double spike in buying pressure that could kick-start a run-up for DOGE.
While technically, this outlook makes sense, investors need to keep a close eye on Bitcoin price, which could ruin the setup for the meme coin.
Dogecoin price awaits buy signal
Dogecoin price has been producing lower highs since May 2021 and has created a declining trend line that has kept the weekly DOGE candlesticks from closing above it. This massive sell-off could be coming to an end, which could result in an explosive breakout.
The most recent sell-off between August 17 and September 7 knocked Dogecoin price from $0.0890 to $0.0582. This 35% crash resulted from rejection at the multi-year declining trend line.
Regardless, the top of the aforementioned run-up formed equal highs at roughly $0.0890, which will be the target of the next run-up. The aforementioned crash caused DOGE to sweep below the equal lows at $0.0574 and tagged the $0.0491 to $0.0578 demand zone.
As a result, the reversal in the Dogecoin price will have an extra oomph to push it higher. The only green signal that DOGE needs is from Bitcoin price. The big crypto seems to be in a pickle, and the directional bias will be established after the Federal Open Market Committee (FOMC) meeting later today.
Although DOGE was supposed to collect the sell-stop liquidity below these swing lows, it did not. Instead, the Dogecoin price formed a base here after a brief consolidation and triggered a 7% run-up so far.
Regardless, investors can expect a 50% run-up in Dogecoin price from the current position at $0.0580.
DOGE/USDT 1-day chart
An interesting metric to back the technical standpoint’s bullish outlook is the accumulation of whales holding between 10,000 to 10,000,000 DOGE tokens. These investors started accumulating the meme coin in mid-August and are continuing to do so.
The most impressive group is the ones that hold between 1 million to 10 million DOGE tokens; these holders have increased from 3639 to 3677, denoting an addition of 38 new whales to the category.
 [09.03.03, 21 Sep, 2022]-637993316379100110.png)
DOGE supply distribution
While technicals and on-chain metrics lean toward a bullish outlook, all eyes are on Bitcoin price. If Dogecoin price produces a daily candlestick close below the $0.0491 to $0.0578 demand zone will create a lower low and invalidate the bullish thesis.
In such a case, DOGE could slide lower and tag the $0.0470 support floor, where sidelined buyers can step in and trigger another recovery rally.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Arbitrum receives 2.5 million ARB funding request from Wormhole foundation
Wormhole, a crypto and web3 messaging protocol, has submitted a proposal to encourage users to mint native USDC on the Arbitrum chain. The goal is to attract 100 million USDC and migrate it from other chains to Arbitrum.
Tether increased its secured loans in Q2 despite commitment to reduce lending
Tether Holdings has resumed the lending of its stablecoins in the form of secured loans to clients after announcing that it is set to wind down this practice less than a year ago. The information came to light in the firm’s recent quarterly financial update, according to a report by The Wall Street Journal.
XRP price recovery likely as Ripple executives call out SEC and Chair Gary Gensler for their stance on crypto
XRP price outlook is bullish as the asset tests the supply zone at $0.5174. Pro-XRP attorney John Deaton shared his views on the likelihood of a settlement by the SEC in its lawsuit against Ripple.
Mt Gox creditors hit by delay in repayment deadlines for $3.8 billion in Bitcoin
In a September 21 letter, the Mt Gox Rehabilitation Trustee, Nobuaki Kobayashi shared that he has received permission from the Tokyo District Court to extend the deadline for the three phases of repayment of creditor funds.
Bitcoin: BTC contemplates crash in September
Bitcoin price remains unfazed by the US CPI announcement on September 13 and continues to move in a range. The weekly chart, however, shows a potential short-term recovery rally that could set the stage for a steep correction.