Dogecoin price shows an interesting development after its breakout from a bullish setup on 23 March. The initial move was volatile, however, DOGE seems to be stuck consolidating, hinting at an explosive, especially when on-chain metrics show that whales are increasing their rate of accumulation.
A higher recovery on the cards?
Dogecoin price action from 29 September, 2021, to 23 March has created three distinctive lower highs and lower lows as it crashed 85% from its all-time high at $0.744. Connecting the swing points in this downtrend forms a falling wedge pattern.
While this setup is popular, it forecasts a 34% upswing, obtained by measuring the distance between the first swing high and swing low. Adding this distance to the breakout point reveals a target of $0.178.
On 24 March, Dogecoin price shattered through the falling wedge’s upper trend line at $0.130 and has been stuck in consolidation ever since. The sideways movement seems to have undergone a bullish development as DOGE recently rallied above the 50-day and 100-day Simple Moving Averages (SMA) at $0.132 and $0.139.
This uptick and flip of the crucial hurdles will now serve as a support level that will facilitate a further uptrend. Therefore, investors need to keep a close eye on the meme coin as it could explode.
Interestingly, enough, a breakout will likely propel DOGE by 28% to the first target at $0.178, which also happens to coincide with the 200-day SMA. Therefore, this barrier is likely where Dogecoin price will form a local top.
However, if buyers band together and clear this hurdle, the momentum could be enough to trigger an extension of the uptrend to the $0.216 ceiling. This leg-up, however, would constitute a 51% gain.
Supporting this insane run-up for the mum meme coin is the supply distribution chart. This on-chain index tracks the changes in the wallets holding DOGE tokens. Over the last few weeks, wallets holding 10 million or more tokens have propped up their accumulation from 77.93% to 81.87% between 8 February and 20 April.
This sudden and exponential uptick serves as a proxy of institutional investors’ interests and foreshadows the incoming bull run.
Supply Distribution | Source: Santiment
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