- Dogecoin price is range-bound as it trades inside a horizontal parallel channel.
- Short-term bearish pressure will push DOGE to lean into the 50 one-day moving average (MA).
- A breakdown of this could push the meme coin down by 11% to $0.047.
Dogecoin price is at an inflection point that could help determine its direction for the foreseeable future.
Dogecoin price approaches a crucial level
Dogecoin price is range-bound between a supply barrier at $0.063 and a stable support level at $0.047 for almost a month. Drawing trendlines along these barriers results in a horizontal parallel channel.
The technical formation predicts a 25% move, and its direction is dependent on the breakout. Depending on which trendline is breached, Dogecoin could either surge to $0.078 or pullback to $0.032.
At the time of writing, DOGE seems to have been rejected by the upper trendline and is heading towards the lower boundary.
Due to the lack of volatility and capital inflow from investors, the 50 one-day MA is catching up to the Dogecoin price. If DOGE manages to bounce off this moving average, it could boost investor confidence and push the price higher.
In case of a decisive close above the upper-range at $0.063, then Dogecoin price could first rally 12% towards $0.070 and then climb another 11% to $0.078 if buyers continue to pile-up.
DOGE/USDT 1-day chart
It is worth noting that the optimistic scenario is dependent on Dogecoin price defending the 50 one-day MA. If DOGE slices through it for some reason, an 11% retracement to $0.047 is more than likely.
Here, the worst-case scenario would be for sellers to cut through the parallel channel’s lower trendline at $0.047, as this will invalidate the bullish outlook and trigger a 16% sell-off to $0.039. If the bearish momentum persists, then Dogecoin price might sell-off 20% to $0.032.
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