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Dogecoin rally depends on Bitcoin's next move

Dogecoin rally depends on Bitcoin's next move

GrafaGrafa2024/09/03 03:35
By:Liezl Gambe

According to recent analysis, Dogecoin (CRYPTO:DOGE) is gaining attention from cryptocurrency investors as it approaches a potential breakout from a descending wedge pattern. 

While investor demand remains high, the broader market conditions have kept a breakout elusive, raising questions about whether a rally is imminent or if DOGE will continue to consolidate.

Despite recent price stagnation, investor sentiment around Dogecoin remains optimistic. 

According to the Global In/Out of the Money (GIOM) indicator, approximately 60.72 billion DOGE, valued at $5.76 billion, is positioned for profitability. 

This supply was acquired in the range of $0.101 to $0.130, which has historically acted as a critical support and resistance zone for Dogecoin. 

The continued buying interest during recent price dips further underscores the bullish sentiment among investors.

Dogecoin's price movement is closely linked to Bitcoin (CRYPTO:BTC), with the two cryptocurrencies sharing a high correlation of 0.92. 

This strong relationship means that Dogecoin’s price often mirrors Bitcoin’s performance. 

When Bitcoin consolidates or trends upward, DOGE tends to follow suit. 

However, if Bitcoin faces a downturn, it could negatively impact Dogecoin's rally prospects.

Currently, Dogecoin is holding above a critical support level at $0.094, which has historically been a reliable point for price rebounds. 

The cryptocurrency has attempted multiple times to break through the resistance at $0.118 but has yet to succeed, leading to a period of consolidation. 

According to price analysis, a successful breach of the $0.118 resistance could signal a breakout from the descending wedge pattern, potentially triggering a 65% rally with the next target at $0.182. 

Achieving this level would signify a strong recovery and restore confidence in Dogecoin's growth potential.

However, the resistance levels at $0.130 and $0.118 have proven to be challenging barriers. 

Failure to break these levels could result in continued consolidation above $0.094, undermining the bullish outlook for Dogecoin. 

Ultimately, Bitcoin's performance will be a key factor in determining whether Dogecoin can achieve a breakout or face further consolidation.

At the time of writing, the Dogecoin (DOGE) price was $0.10, and the Bitcoin (BTC) price was $59,472.98.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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