Dogecoin to $5? Analyst Predicts Potential 5,000% Rally Based on "Gaussian Channel" Model

Dogecoin (DOGE) has been generating significant buzz after a 159% surge from November 6 to November 12, followed by a period of consolidation. On November 18, the memecoin formed a bullish engulfing candle, sparking speculations that it could be on the verge of testing its all-time high of $0.73. Amid this renewed interest, one analyst believes that DOGE may be poised for a massive rally, potentially reaching $5, based on a Gaussian channel model.

The Gaussian Channel: A Key Indicator for Dogecoin’s Potential

The Gaussian channel is a technical indicator that helps traders identify the upper and lower bounds of price action, based on the asset's historical distribution. According to market pattern analyst Tardigrade, Dogecoin is currently positioned in such a way that it may replicate past parabolic price movements. The key point of support, the mid-band line of the Gaussian channel, has been tested three times in Dogecoin's history, and if the pattern holds, DOGE could be set for an "incredible pump."

The Gaussian channel analysis suggests that if Dogecoin follows its historical trajectory, it could experience a significant price increase in the coming weeks.

Aiming for a New All-Time High

Independent trader Javion Marks also believes that Dogecoin is on track for a major price surge. Marks has drawn parallels between previous parabolic price movements in 2016, 2021, and 2024, which all followed similar setups. He speculates that Dogecoin could soon retest its previous all-time high of $0.73 and might even break past it, potentially reaching as high as $3 to $5 in the next year.

This prediction is based on the principle of diminishing returns, with a logarithmic scale chart showing that Dogecoin's price could peak between $3 and $5 by 2025. While Dogecoin has historically faced resistance near its previous all-time high during breakouts, there is a possibility that it could steadily rise past the $0.73 mark before accelerating into rapid price discovery.

On-Chain Data Suggests Bullish Sentiment

From an on-chain perspective, data from Santiment, a blockchain analytics platform, indicates a recent decline in DOGE wallet activity. Interestingly, this could be a bullish signal, as the decrease in wallet activity often suggests capitulation from novice traders, which is typically followed by accumulation from larger investors or "whales." As Santiment points out, when smaller traders liquidate their positions, it often leads to larger investors buying up those coins and holding them for the long term—often resulting in a price increase.

Conclusion

While the idea of Dogecoin reaching $5 may seem ambitious, the Gaussian channel model and the historical patterns of price surges suggest that a significant rally could be on the horizon. With the combination of technical indicators and on-chain data, some traders believe that Dogecoin could be gearing up for another explosive rally, possibly as soon as the next few weeks. As always, market conditions and investor sentiment will play a key role in determining whether Dogecoin can achieve this ambitious target.