An analyst has explained how Dogecoin breaking the $0.087 barrier could open the way to DOGE price levels almost double the recent ones.
Dogecoin currently has three major lines converging at $0.087
In a new after at X, analyst Ali discussed what DOGE’s weekly chart currently looks like in terms of some key historical lines. Specifically, the interest levels here are the 100 week EMA, 200 week EMA and 0.786 Fibonacci.
A ‘moving average’ (MA) refers to an analytical tool that calculates the average of a given quantity over a period of time, and as the name implies, it moves over time and changes its value as the quantity fluctuates.
This basic tool is very useful because it smoothes the curve by removing local fluctuations, making a study of long-term trends easier to conduct. However, in the context of the current topic, it is not a normal MA that is of interest, but rather a modified form called the exponential moving average (EMA).
The EMA works like the usual MA, except it gives greater weight to the most recent quantity measurements. What this means is that the older the value, the less weight it has in the metric, so the changes on the line more strongly reflect the last price direction.
Here is a chart showing the trend in the 100-week and 200-week EMAs for Dogecoin, as well as the weekly price curve of the meme coin:
Looks like the asset's weekly value has been interacting with these lines recently | Source: @ali_charts on X
As can be seen from the chart above, these two Dogecoin EMAs have recently approached each other and have converged to a narrow range around the $0.087 level.
In the past, these two EMAs of the cryptocurrency have provided resistance to the price and it looks like Dogecoin’s weekly chart is struggling with them again as it has found rejection here over the past three weeks.
However, these two lines are not the only ones converging near $0.087; it appears that the Fibonacci level of 0.786 is doing the same. The Fibonacci levels in the chart are some ratios derived from the famous Fibonacci sequence.
In this series, dividing any number (except the first few) by the next number always gives a ratio of approximately 0.618. The square root of this number is 0.786, the level the analyst indicated here.
So Dogecoin has a big wall at $0.087, consisting of the convergence of all these historically important lines. “Breaking this barrier could open the gates for DOGE to nearly double its price, with a target price of $0.14,” the analyst explains.
DOGE Award
Dogecoin has seen a rise above $0.080 over the past day, as the chart below shows. It now remains to be seen whether the coin will retest this $0.087 level that could be so crucial for the coin.
DOGE has registered some rise in the last 24 hours | Source: DOGEUSD on TradingView
Featured image of Kanchanara on Unsplash.com, charts from TradingView.com