Dogecoin to $5? It’s possible according to a ‘Gaussian channel’ model

Following a 159% surge between November 6-12, Dogecoin (DOGE) has entered a higher-range consolidation period. On November 18, the prominent memecoin formed a daily bullish engulfing candle, sparking market speculation of another climb toward its all-time high of $0.73.

Dogecoin 1-day chart. Source: TradingView

As the market focuses on DOGE once more, a specific indicator suggests a high probability of another parabolic rally in the coming weeks.

Dogecoin's "Gaussian Channel" Points to an Impending Breakout

Trader Tardigrade, a market pattern analyst, observed in an X post that Dogecoin is poised to replicate its historical price trajectory based on the Gaussian channel.

A Gaussian channel is an indicator that identifies the upper and lower price action channels using the principle of asset distribution.

Dogecoin weekly analysis by Tardigrade. Source: X.com

Tardigrade's analysis shows that DOGE has found support from the mid-band line of the Gaussian channel for the third time. If history repeats, the trader predicts "an incredible PUMP" for DOGE.

Meanwhile, independent trader Javion Marks believes Dogecoin's retest of its previous all-time high (ATH) at $0.73 is "practically imminent." Marks has drawn parallels between parabolic rallies in 2016, 2021, and 2024, with similar setups occurring each time.

Related: Why is Dogecoin price up today?

Dogecoin Rally May Reach $3-$5

While the Gaussian channel projects a parabolic rise beyond $1, the upper limit target was calculated using the laws of diminishing returns, based on DOGE's previous Return on Investment (ROI) percentage.

Dogecoin 1-week chart. Source: TradingView

As seen in the chart, the blue curve represents diminishing returns on a logarithmic scale. Dogecoin is expected to reach between $3 and $5 in 2025.

Historically, DOGE has encountered resistance below its previous ATH during breakouts. Therefore, the memecoin may gradually rise above $0.73 before experiencing a rapid price discovery phase.

Data analytics platform Santiment has noted a decline in DOGE wallet activity over the past day. From an onchain perspective, this is a bullish sign, indicating:

"When a network's overall amount of wallets declines, it is a sign of FUD and capitulation from novice traders that is often a bullish indicator for the coin's price (since those liquidated coins are likely being bought by larger whales and sharks who are hodling for the long-term."

Related: Price analysis 11/18: SPX, DXY, BTC, ETH, SOL, BNB, XRP, DOGE, ADA, SHIB

Please note that this article does not constitute investment advice or recommendations. All investments and trading involve risk, and readers should conduct their own research before making decisions.