Dogecoin has seen its market value drop by more than 77% over the past three months.
The meme coin appears to be bound for an explosive rally.
If buy orders continue to pile up, DOGE could target $0.34.
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Warren Buffett’s famous quote about being “greedy when others are fearful” seems to be alive in the cryptocurrency market. While the Crypto Fear and Greed Index sensed “extreme fear” in the markets, Dogecoin has surprised investors as it enters a nearly 80% rally.
Dogecoin Breaks Out
Dogecoin looks ready to rally.
DOGE entered a consolidation period after peaking at an all-time high of $0.74 on May 8. Since then, its price has been making a series of lower highs while the $0.16 support level prevented it from a steeper correction.
It appears that a descending triangle is emerging on DOGE’s daily chart by drawing trend lines around the pivot highs and lows.
Over the past few hours, a sudden spike in buying pressure managed to push DOGE beyond the triangle’s hypotenuse, suggesting a potential breakout. Further buying pressure around the current price levels could confirm that DOGE is primed for a 78% advance.
This target is determined by measuring the triangle’s y-axis and adding that distance to the breakout point.
Source: TradingViewThe Tom DeMark (TD) Sequential indicator adds credence to the optimistic outlook as it currently presents buy signals on both the daily and weekly charts. The bullish formations developed as red nine candlesticks, which is indicative of a one to four candlestick upswing within these time frames.
A daily or weekly green two candlestick trading above a preceding green one candle can serve as confirmation of the TD’s buy signal, which could help fuel Dogecoin’s upswing toward $0.34.
Source: TradingViewAlthough the odds seem to favor the bulls, investors must be aware that Dogecoin needs to hold above $0.16 for the bullish scenario to remain intact. Failing to do so could lead to a significant spike in the selling pressure behind DOGE.
A sell-off around this price point could see the eighth-largest cryptocurrency by market capitalization plunge by roughly 40% to $0.095.
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