• Dogecoin price is struggling to break out but shows a decent probability of a bullish move.
  • Investors should expect a volatile 18% move as on-chain metrics also suggest the same.
  • A four-hour candlestick close below $0.076 will invalidate the bullish thesis.

Dogecoin price continues to coil up, hinting that a volatile move is on its way soon. Adding evidence from on-chain metrics leans the scales favoring bulls. 

Dogecoin price and bullish narratives

Dogecoin price shows a descending triangle formation by connecting the four lower highs and three equal lows formed since May 12 using trend lines. This technical formation forecasts an 18% move obtained by adding the distance between the first swing high and the swing low to the breakout point.

While a descending triangle has a bearish bias, the recent recovery actually suggests a potential for bullish recovery. Adding credence to this outlook is that price has flipped the $0.082 resistance barrier into a support floor. 

Investors need to wait for a decisive four-hour candlestick close above $0.087 to confirm a bullish breakout. Once this development occurs, the theoretical target lies at $0.100, obtained by measuring the distance between the first swing high and swing low to the breakout point at $0.087. 

Despite a bullish breakout, DOGE needs to overcome the $0.093 hurdle to reach its theoretical target. In some cases, this move could extend to $0.101. 

DOGE/USDT 4-hour chart

DOGE/USDT 4-hour chart

Supporting this bullish outlook for Dogecoin price is the increase in the number of addresses holding DOGE for more than a year. The count of these market participants has increased from 1.74 million on May 8 to 2.49M as of June 5. 

This 43% spike in long-term investors indicates that these buyers are confident in the bullish performance of the Dogecoin price 

DOGE addresses by time held

DOGE addresses by time held

Regardless of the bullish technicals and on-chain metrics, a correction or sell-off in Bitcoin price could stop or hinder bulls’ plans dead in their tracks. Investors need to be cautious about a sudden reversal in Dogecoin price that produces a four-hour candlestick close below $0.076.

Such a move would constitute a bearish breakout from the descending triangle and invalidate the bullish thesis. In such a case, the theoretical forecasts reveal an 18% crash to the $0.062 support floor.

 

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