With Grayscale suing the SEC, how will Dogecoin price and crypto markets react?

Dogecoin price witnessed a massive bounce last week but recently pulled back due to the market condition. Since then, DOGE is trying to find a stable footing for the next leg-up. On the other side of the ecosystem, Grayscale, a popular institutional investment company and a digital currency asset manager has filed a lawsuit against the Securities and Exchange Commission (SEC) for denying the conversion of Grayscale Bitcoin Trust to a spot Bitcoin ETF.

Grayscale puts SEC on the stand

As of June 30, Michael Sonnenshein, the CEO of Grayscale announced that they have sued the SEC for denying Bitcoin ETF applications. This development comes after the regulators denied the company’s application to convert their trust into spot Bitcoin ETF.

Additionally, the SEC has also pushed back on multiple ETF filings over the last few years citing concerns like market manipulation, lack of liquidity and so on. 

As a result, Grayscale filed a lawsuit against the SEC with the U.S. Court of Appeals in Washington DC to review the SEC’s order. The case also claims that the regulator violated the Administrative Procedure Act and Securities Exchange Act.

In a recent annnouncement, Grayscale stated that it,

believes in the SEC’s mandate to protect investors, maintain fair, orderly, and efficient markets and facilitate capital formation -- and we are deeply disappointed by and vehemently disagree with the SEC's decision to continue to deny spot Bitcoin ETFs from coming to the U.S. market

Despite this move from a crypto company, the markets’ reaction remained muued . Bitcoin price is still hovering directionless around the $20,000 psychological level. Dogecoin price, however, shows signs that it wants to move higher.

Dogecoin price signals its intention

Dogecoin price rallied roughly 60% between June 19 and June 26 and set a swing high at $0.078, just below the high-time-frame resistance barrier at $0.082. This massive uptrend faced exhaustion before retesting a crucial hurdle, resulting in an 18% retracement.

The correction was supported by the 8-day Exponential Moving Average (EMA). DOGE is currently trading above the 8-day EMA at $0.067 and the 34-day EMA at $0.072. As the meme coin gets coiled up, the possibility of a volatile move seems more likely. 

Assuming the breakout favors the bull, Dogecoin price can rally 20% to retest the $0.082 hurdle. The upside could be capped here, but a resurgence of buying pressure that flips this level into a support floor will signal that bulls want more.

In this case, DOGE could travel another 34% to retest the $0.109 ceiling. This run-up, in total, would constitute a 60% gain and is likely where Dogecoin price forms a local top.

DOGE/USDT 1-day chart

On the other hand, if Dogecoin price produces a daily candlestick close below $0.048, it will create a lower low and invalidate the bullish thesis for DOGE. This scenario could further evolve into sellers taking control and crashing the meme coin by 70% to $0.014.