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Analysis

Dogecoin needs to do this to unlock its full potential

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Source: Pixabay

Dogecoin’s bullish trajectory since mid-October has been a welcoming change following tepid movement in September. DOGE’s value has risen by nearly 30% since last week and the alt is currently challenging a crucial resistance zone in order to unlock its full potential.

However, keep in mind that DOGE’s price progression needs to be backed by consistent volumes otherwise some near tailwinds can begin to creep into the market. At the time of writing, DOGE traded at $0.247, down by 3.5% over the last 24 hours.

Dogecoin 4-hour Chart

Source: DOGE/USD, TradingView

Dogecoin looked to break past the confluence of its 200-SMA (green), $0.273-resistance and an upper sloping trendline to revisit levels seen during August’s bull run to $0.3495. Now this could turn out to be tricky as bulls would need to gather strong numbers up till $0.354 in order to overcome some near-term barriers at $0.301 and $0.320.

If bulls falter at the aforementioned resistance zone (white), $0.230 support could be called into action, with $0.1945 serving as a deeper defensive resource. On the other hand, a move above with conviction $0.355 would give bulls a lot more breathing space in order to tackle $0.380 and a long term target of $0.440.

Reasoning 

Before shifting gears above $0.273, it’s worth noting that DOGE was in lieu of some near-term losses due to a double top around $0.273. The lower timeframes suggested that bearish pressure had begun to seep into the market. However, a rising RSI on the daily timeframe along with Directional Movement Index’s bullish crossover expelled fears of a prolonged sell-off.

Conclusion 

Once the present round of selling pressure concludes, DOGE was expected to retest the resistance trifecta of the 200-SMA (green), $0.273 price ceiling and the upper sloping trendline (blue).

A breakout above this confluence on strong volumes would allow DOGE to tackle a key supply zone, which could spur a comeback to the $0.440 mark. As highlighted earlier, DOGE would need to maintain constant upwards pressure in order to maximize its gains.

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A business graduate with a keen interest in emerging markets across South East Asia. As a financial journalist, he covered stocks and market reports across Australia and New Zealand as well.