Dogecoin's 20-Month SMA Holds Key to 480% Rally Continuation

Dogecoin's future price trajectory is a topic of intense debate among market analysts, with some suggesting that a key indicator could determine whether the cryptocurrency will experience a significant rally or a sharp decline. Market technician Cantonese Cat (@cantonmeow) has identified the 20-month simple moving average (SMA) as a critical metric for Dogecoin. Currently, Dogecoin is trading above this moving average, which is plotted at $0.1751. According to Cat, there have been only three clean retests of the 20-month SMA since 2014, each of which preceded a substantial price increase.

The first retest occurred in March 2017, when the price briefly touched the average near $0.00020 before surging over 9,000% to reach its January 2018 peak. The second retest happened in the winter of 2020, with the price kissing the average at roughly one-fourth of one cent before a parabolic 34,500% run to $0.73 the following May. The third and current encounter began in August last year, with Dogecoin rallying by more than 480%.

As of the latest data, two successive monthly candles dipped into the zone just below twenty-cents, but both were bought aggressively, leaving higher wicks and preserving the upward slope of the average. Cantonese Cat argues that as long as the 20-month SMA remains intact, Dogecoin is likely to continue its upward trend. A decisive monthly close beneath $0.175 would place the entire structure at risk and could usher in a multi-month downtrend similar to those that followed the 2018 and 2021 climaxes.

Analyst Kevin (@Kev_Capital_TA) provides a broader perspective by overlaying the micro view on the total crypto market capitalization excluding Bitcoin (TOTAL2). His chart tracks TOTAL2 in monthly candles back to 2017, defining a seven-year rising channel whose upper rail repelled price at the January 2018 and November 2021 alt-season tops. Since the June 2022 low, the market has carved out an ascending triangle, with a rising series of higher lows pressing against a flat-topped supply zone between roughly $1.43 trillion and $1.7 trillion.

The apex of the triangle is now looming, with aggregate alt-cap already worth about $1.2 trillion. All that stands between the current print and a confirmed breakout is a monthly close above the upper edge of that yellow rectangle. Kevin’s projection measures the height of the pattern and adds it to the breakout level, dropping a vertical marker that intersects the mid-channel near $5.89 trillion. Kevin’s first Fibonacci extensions target is the 1.618 at $4.06 trillion. Higher extensions at 1.886, 2.0, and 2.618 cluster around $4.57 trillion, $5.89 trillion, and $6.9 trillion respectively, with the last coinciding almost exactly with the channel’s ceiling and circled as the analyst’s ultimate upside objective.

Kevin states that altcoins are just scratching the surface of what is possible in the coming months, provided that macro-liquidity and regulatory factors permit capital rotation out of Bitcoin into the wider market. In that scenario, the 20-month SMA on Dogecoin would likely continue to slope higher, setting the stage for an explosive move higher. Conversely, failure of the alt-cap triangle would make a sustained loss of the SMA far more probable, robbing Dogecoin of its historical launch-pad.

For now, the indicator holds—and with it the prospect that Dogecoin could be primed for yet another bout of furious upside. However, both analysts caution that the monthly close will tell the story: above the 20-month SMA and an alt-cap breakout, or below it and back into hibernation. At press time, Dogecoin was trading at $0.189.