Dogecoin (DOGE) and other top memecoins have rallied strongly in the last 24 hours, particularly as Bitcoin (BTC) returns above the $100,000 milestone level.
The latest US consumer price index (CPI), showing a rise in inflation in November, has boosted demand for cryptocurrencies, given the higher probability of a 25 basis point interest rate cut in the upcoming Federal Reserve officials meeting.
Lower rates boost the opportunity cost of holding riskier assets.
Dogecoin’s price rallied 7% in the last 24 hours to reach $0.417 on Dec. 12. In addition to the CPI data, the memecoin’s bounce emerged upon its retest of the 200-4H exponential moving average (200-4H EMA; the blue wave)—at around $0.0375—as support.
Now, DOGE/USD is consolidating below its 50-4H EMA resistance (the red wave)—at around $0.422—as resistance. If the pair weakens below the resistance wave, its likelihood of dropping back toward its 200-4H EMA will increase.
Interestingly, the $0.0375 level coincides with the lower boundary of DOGE’s prevailing ascending channel range.
Conversely, a decisive breakout above the 200-4H EMA could send the price toward the channel’s upper boundary, around $0.471.
Dogecoin’s weekly chart shows its price undergoing a cup-and-handle breakout with a price target of around $1.
A cup-and-handle breakout pattern forms when the price undergoes a U-shaped recovery followed by a period of consolidation. Meanwhile, it resolves when the price breaks above the common neckline resistance and rises by as much as the distance between the cup’s trough and neckline.
As of Dec. 12, DOGE was halfway done with its breakout stage, consolidating inside a Fibonacci retracement range defined by the $0.400-481 area. A break below the $0.400 support may delay the breakout toward $1, setting DOGE toward lower Fib supports instead.
That includes $0.319 and $0.218 supports, with the latter being the cup-and-handle pattern’s neckline.
Shiba Inu (SHIB) is trending inside an ascending channel pattern on the four-hour chart and was bouncing after testing the lower trendline as support on Dec. 12. It is also attempting to hold above the midline support, coinciding with the 50-4H EMA (the red wave) near $0.00002907.
A continued bounce from the current levels could have SHIB/USD eye the channel’s upper trendline next, aligning with its 1.618 Fibonacci retracement line at around $0.00003566. That is around 23-25% up from the current price levels.
Conversely, a sustained breakdown below the 50-4H EMA could send SHIB prices down toward the channel’s lower trendline. The downside target aligns with the 0.236 Fib retracement line at around $0.00002446.
Shiba Inu broke above a multi-year descending trendline resistance in early November. As of Dec. 12, the memecoin had dropped back to test the same resistance as support, which shows traders are confirming the viability of this breakout one more time.
That leaves SHIB with two possible scenarios. First, it could rebound from the descending trendline toward its immediate resistance target at around $0.00003694, up about 50% from the current price levels.
Second, SHIB could drop below the descending trendline and switch its bias in favor of bears all over again. Historically, testing the descending trendline as resistance has send SHIB prices down by 75-95% — toward the support area defined via the red bar in the chart above.
In other words, SHIB/USDT can drop by as much as 80% if it decisive breaks below its descending trendline support.
Pepe’s (PEPE) four chart shows it trending inside an ascending triangle range. On Dec. 9, the memecoin tested the channel’s upper trendline at around $0.00002700, which followed a 25% decline toward the lower trendline until Dec. 11.
Now, the price has entered the bounce stage, eyeing a run-up toward the upper trendline again. However, PEPE’s upside momentum is showing signs of weakening near the $0.00002387 level, suggesting the price may retreat toward the lower trendline level of $0.00002150 next.
On the other hand, a break above the $0.00002387 level could send PEPE back toward the $0.00002700 level.
Pepe’s weekly chart shows it trending inside an ascending parallel channel. As of Dec. 12, the memecoin was testing the channel’s upper trendline as resistance, aligning with the 0.0 Fib retracement level at around $0.2636.
Its weekly relative strength index (RSI) is also above the overbought threshold of 70, suggesting that the rally is becoming overheated and may undergo a period of consolidation or correction next.
A persistent selloff near the resistance confluence could send PEPE prices toward the channel’s lower trendline. The downside target may align with the 0.5 Fib line ($0.00001361) or the 0.618 Fib line ($0.00001080).
Yashu Gola is a journalist focusing on cryptocurrency markets since 2014. He writes for Cointelegraph and CoinChapter and has previously served as the chief editor for NewsBTC.