Dogecoin to $5? It’s possible according to a ‘Gaussian channel’ model
2024.11.19 18:27
Following a 159% rise between Nov. 6 and Nov. 12, Dogecoin (DOGE) has exhibited a period of higher-range consolidation. On Nov. 18, the largest memecoin completed a daily bullish engulfing candle, which welcomed market speculations for its next ascend near its all-time high of $0.73.
Dogecoin 1-day chart. Source: TradingView
With the market turning its attention toward DOGE again, one particular indicator highlighted its historical probability of undergoing another parabolic rally over the next few weeks.
Dogecoin’s “Gaussian Channel” hints at breakout
Trader Tardigrade, a market pattern analyst, mentioned in an X post that Dogecoin is currently en route to repeat its historical price trajectory based on the Gaussian channel.
A Gaussian channel is an indicator that allows traders to identify the upper and lower channels of price action based on the principle of asset distribution.
Dogecoin weekly analysis by Tardigrade. Source: X.com
As analyzed, Doge has gained support from the mid-band line of the Gaussian channel for the third time in history. If history repeats itself, the trader concluded that “DOGE will experience an incredible PUMP.”
Meanwhile, Javion Marks, an independent trader, believed that Dogecoin’s retest to its previous all-time high (ATH) at $9.73 is “practically imminent.”
Marks has drawn similarities between each parabolic rise in 2016, 2021, and 2024, facilitating similar setups on each occasion.
Related: Why is Dogecoin price up today?
Dogecoin rally could extend as far as $3 to $5
While a parabolic rise beyond $1 has been outlined based on the Gaussian channel, the upper limit target was calculated based on the laws of diminishing returns, roughly estimated on its previous return on investment (ROI) percentage.
Dogecoin 1-week chart. Source: TradingView
As illustrated in the chart, the blue curve represents the diminishing returns on a logarithmic scale, where Dogecoin is expected to top between $3 and $5 in 2025.
Historically, Dogecoin has faced a bit of resistance just below its previous all-time high range during its breakout, so there is a possibility that the memecoin might grind out a position above $0.73 at a steady pace before undergoing rapid price discovery.
Meanwhile, Santiment, a data analytics platform, highlighted that DOGE wallet activity had declined over the past day. From an onchain perspective, this is a bullish sign, as the platform mentioned,
“When a network’s overall amount of wallets declines, it is a sign of FUD and capitulation from novice traders that is often a bullish indicator for the coin’s price (since those liquidated coins are likely being bought by larger whales and sharks who are hodling for the long-term.”
Related: Price analysis 11/18: SPX, DXY, BTC, ETH, SOL, BNB, XRP, DOGE, ADA, SHIB
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
