- Dogecoin price has formed a cup-and-handle pattern.
- C&H pattern points to more gains in the near term.
- The soaring crude oil prices pose a major risk to DOGE.
Dogecoin price remained in a narrow range on Sunday as concerns about the Federal Reserve and rising crude oil prices persisted. DOGE token was trading at $0.1096, a few points below this month’s high of $0.1173. So, will the biggest meme coin in the industry rally or crash?
Crude Oil Prices Pose a Major Risk to DOGE and Other Tokens
Dogecoin and other cryptocurrencies face a major risk as energy prices remain elevated. Brent crude ended the week at $109, while the West Texas Intermediate rose to $107.
Oil prices will likely continue rising for three main reasons. First, the US and Iran remain in a quagmire with no exit strategy. Trump is afraid that restarting the war will push oil prices much higher at a time when inflation is soaring. His safest bet, for now, is to continue the blockade, a move that will slowly push oil prices higher.
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Second, Russian oil supplies may remain under pressure after Ukraine launched a wave of 500 drones that struck the four biggest refineries in Moscow. Ukraine has successfully disrupted Russia’s oil sales in the past few months using these low-cost drones.
Third, data show that global oil inventories are falling by over 4 million barrels per day. With the US heading into the driving season, demand is likely to jump, pushing prices higher.
These numbers have a major impact on Dogecoin and inflation. Higher oil prices lead to higher inflation, which, in turn, raises bond yields. It becomes highly difficult for the Federal Reserve to cut interest rates. Data released last week showed that the headline CPI and PPI jumped to 3.8% and 6%, respectively.
Another risk to Dogecoin’s price is that demand for DOGE ETFs has dried up this year. Data shows these funds have attracted $1.2 million in inflows this month, bringing cumulative inflows to $10.9 million and net assets to $14 million. The total assets account for about 0.09% of the market cap, lower than other coins.
Dogecoin Price Technical Analysis
The daily chart shows that the DOGE price has remained in a tight range over the past few days. On the positive side, this consolidation seems to be part of the formation of the handle section of the cup-and-handle pattern. C&H is one of the most common bullish continuation patterns in technical analysis.
The coin has remained above the 50-day moving average and the Supertrend indicator. Therefore, there is a likelihood of a strong bullish breakout in the coming days. If this happens, the initial target will be the cup’s upper side at $0.1173. A move above that level will signal further gains, potentially to $0.15.
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