Key Takeaways
Dogecoin ( DOGEUSD ) has been one of the biggest gainers following the election of Donald Trump last week, and the cryptocurrency meme coin got another boost this week when the president-elect announced the creation of a new agency that carries the acronym DOGE.
The department, which will be co-led by prominent Trump backer and crypto enthusiast Elon Musk , aims to reduce government expenditure and cut excessive red tape. Throughout Wednesday, Musk posted several references to the DOGE department on his social media platform X , which included the meme coin’s symbolic Shiba Inu dog.
Since election day, Dogecoin has surged more than twofold to a three-year high, with the price currently sitting just below this week’s peak as retail traders flood back into cryptocurrencies amid expectations of a crypto-friendly incoming administration. Dogecoin was unchanged Thursday afternoon at $0.39.
Let’s take a closer look at Dogecoin's weekly chart and identify key price levels that investors may be watching.
Cup and Handle Breakout
Dogecoin formed a classic cup and handle between November 2021 and October this year before the price made a decisive breakout above the pattern’s upper trendline following last week’s election outcome.
Importantly, the move occurred on the highest weekly trading volume since early March, setting the stage for further speculative buying.
While the relative strength index (RSI) confirms bullish price momentum with a reading above 80, the indicator also flashes extremely overbought conditions, which could lead to sudden reversals.
Let’s use technical analysis to forecast a potential upside price target to monitor, while also identifying key support areas to watch.
Measuring Principle Price Target to Monitor
Investors can forecast a potential upside price target by using the measuring principle , a technique that uses prior price action to predict future moves. When applying the tool, we will measure the percentage move, given Dogecoin’s significant price fluctuations.
To do this, we calculate the percentage change of the cup and handle’s “cup” and add it to the pattern’s top trendline value. For example, we apply a 530% increase to $0.22, which projects a target of $1.385.
It’s worth keeping in mind that Dogecoin’s market capitalization would need to increase to around $203 billion from its current market cap of about $58 billion to reach this bullish price target.
Key Support Areas to Watch
The first support area to watch sits around $0.35, a location on the chart where the meme coin’s price could attract support near mid-August 2021 countertrend peak.
A failure to hold this level could see the cryptocurrency fall to the $0.285 level. Investors may look for entry points in this area near a series of comparable prices positioned just below the October 2021 swing high .
Finally, a deeper correction could lead to a retest of the $0.22 level, a region where traders who prefer not to chase breakouts may look for buying opportunities near the cup and handle pattern’s upper trendline.
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As of the date this article was written, the author does not own any of the above securities.
