- 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 inside a narrow range on Sunday as concerns about the Federal Reserve and the rising crude oil prices remained. 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 are facing a major risk as energy prices remain at an elevated level. 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 push oil prices higher slowly.
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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 shows that global oil inventories are falling by over 4 million barrels per day. With the US heading to the driving season, chances are that demand will jump, pushing prices higher.
These numbers have a major impact on Dogecoin and inflation. Higher oil prices leads to higher inflation, which, in turn, leads to higher 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.
The other risk for Dogecoin price is that demand for DOGE ETFs has dried this year. Data shows that these funds have attracted $1.2 million in inflows this month, bringing the cumulative inflows to $10.9 million and the 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 in 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 that the coin will have 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 point to more gains, potentially to $0.15.
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