The meme coin market has performed well compared to the overall market, especially Dogecoin and Shiba Inu. Considering that Avalanche, Polygon and Uniswap are about to break out of the top 20, Dogecoin is still in 10th place. Analyst Tony Montpeirous identifies levels that will signal a trend reversal in both meme coins.
Is the meme coin market ready to recover?
The Shiba Inu has been trading inside a triangle since the sudden rally that occurred in 2021. The rally on June 21 gave the price a 68% increase, followed by a sideways trading range. Later, its price suffered a short decline around $0.00001100 on July 5th. SHIB is currently trading at $0.000001038 above both the 8- and 21-day SMAs. Thus, it makes analysts believe that the triangle consolidation will trigger the 70% rally in the coming days.
From a risk-reward perspective, taking a position at these levels could yield a 5.75-to-1 setup targeting the $0.00001700 price level. Analyst Tony Montpeirous illustrates this setup in the technical chart below.
A safer approach would be to wait for the bulls to break out of a second attempt and definitively close above $0.00001100 towards new highs.
It is worth noting that both an early and safer position is below wave A of the triangle at $0.000001043. While this level retains an opportunity to join the strong bull run, the bull traps of $0.00000950 should not be overlooked. Satisfying risk-reward trading opportunities come every few months in the cryptocurrency market. This is convincing many investors to join the move to recoup losses in the 2022 bear market. Therefore, a breach of $0.00001100 will trigger massive volatility.
In conclusion, Tony Montpeirous wants investors in this institution to keep two points in mind.
- If the bears break $0.000000920, the uptrend thesis will not be completely invalidated.
- However, it will open the possibility of a sharper drop for Shiba to $0.00000800 resulting in a 23% drop.
Dogecoin price could outperform most cryptocurrencies
In the second part, let’s look at the technical view of Dogecoin, the largest meme coin by market cap. Dogecoin price recently got rejected from the $0.07 resistance. This triggers another sale to the 4-hour demand zone in the $0.05 region of June. On July 5, 2022, the bears emerged to add to the pressure with bearish candles on the 4h chart. Since the candle is now the largest candle for July, it is interpreted as an indicator of the strength of the sellers.
On the technical side, Dogecoin price is currently trading at $0.067. A Fibonacci projection indicator (June high of $0.078 and June 29th low of $0.0669 projected to newly discovered July high of $0.07) is in the same vicinity of June’s 4-hour supply zone at $0.05. It shows a Fibonacci level of 161.8%. This target zone should be watched very closely for an opportunity to buy a potential bearish.
On the contrary, there is a possibility that the continuation of the current downtrend will tip over. As we reported on Kriptokoin.com, Uber recently announced that they are willing to engage with the cryptocurrency community as they have officially accepted Dogecoin as a viable form of payment for their services.
Therefore, there is speculation among the crypto community that Uber will raise Dogecoin. Speculation alone leads day traders to watch $0.071. Because a breach above this will cause serious volatility. After all, a retest of $0.078 is the safest invalidation of the downtrend. A breakout of the latter sends DOGE price into a major bull run targeting $0.25. This means a 285% increase from the current Dogecoin price.
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