Recent price action in the past two days saw the Dogecoin price breaking below supports at both $0.4 and $0.3 in quick succession to eventually reverse after a quick break below $0.27 in the past 24 hours. Since then, the meme coin appears to be gaining momentum, with a little-known yet significant indicator pointing to at least a 100% increase from this point. According to technical analysis by crypto analyst Trader Tardigrade, the recent decline has seen Dogecoin enter the Gaussian Channel.
The Significance Of The Gaussian Channel For The Dogecoin Price
The Gaussian Channel is a comparatively less known technical indicator. However, it is a powerful indicator that identifies areas of price support and resistance by plotting two curves derived from normal distribution to identify regions where a cryptocurrency’s price is trading at extreme highs or lows relative to its recent range.
In the case of Dogecoin, technical price analysis of the daily candlestick timeframe shows that the meme coin is now interacting with the Gaussian Channel.
According to a chart shared on social media platform X by crypto analyst Trader Tardigrade, Dogecoin has been trading above the Gaussian Channel since the middle of October on the daily timeframe. Interestingly, a detailed look into the price chart shows that the mid-band of the Guassian Channel served as a support level during a minor correction. At this time, Dogecoin was trading around $0.1, before eventually bouncing at the mid-band to reach a peak around $0.48 on December 3.
Since then, however, Dogecoin has faced resistance, with a notable decline in the past 24 hours. This decline has now seen the Dogecoin price return to the midband of the Gaussian Channel. With this in mind, Tardigrade’s post on X suggests that the supportive nature of the Gaussian Channel could act as a launchpad for Dogecoin’s next rally.
Momentum Builds Following The Recent Crash
Dogecoin’s dramatic decline below $0.27 to reach a low of $0.2663 marked a significant shift in market sentiment, and buyers appear to have seized on the low price as a strong reentry point. Interestingly, this price point is situated at the Gaussian Channel, further proving the usefulness of this indicator.
At the time of writing, Dogecoin is trading at $0.34, having increased by 27% in the past few hours after bouncing up at $0.2663. The quick rebound suggests that market participants are positioning for another rally, with the Gaussian Channel acting as a prime indicator for this price action.
If the momentum continues to sustain itself, a breakout above the channel’s upper boundary could signal the start of another strong rally. According to Trader Tardigrade’s prediction, this could send Dogecoin on a 100% rally to $0.69. In this case, an imporant level to watch will be $0.355, which is the upper boundary of the Gaussian Channel.
Featured image created with Dall.E, chart from Tradingview.com