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An analyst has explained how Dogecoin could observe a significant rally next if its price can hold the bottom level of this pattern. Dogecoin Is Currently Testing The Lower Bound Of An Ascending Channel
In a new post on X, analyst Ali Martinez has discussed about a long-term pattern forming in the weekly price of Dogecoin. The pattern in question is the “Ascending Channel” from technical analysis (TA), which is a type of Parallel Channel.
A Parallel Channel is a consolidation pattern in which the price of the asset remains locked between two parallel trendlines. The upper level of the channel is likely to provide resistance, while the lower one can be a point of support. Related Reading This Bitcoin Signal Aligns With Price Tops, CryptoQuant Analyst Reveals 2 days ago
Breaks out of either of these lines can imply a continuation of trend in that direction. That is, an escape above the channel is bullish, while a drop under it is bearish.
Parallel Channels can be categorized into three types, based on the alignment of the trendlines with respect to the coordinate axes. Channels that are slopped upwards (that is, those that have trendlines that follow higher lows and higher highs) are known as Ascending Channels. While an asset is inside this type of channel, its price witnesses consolidation to the net upside
Similarly, those of the opposite orientation are called Descending Channels and represent consolidation to the net downside. The third case, where the trendlines are parallel to the time-axis, has no special name.
Now, here is the chart shared by the analyst, that shows an Ascending Channel that the weekly price of Dogecoin has been trading inside for the past decade: Looks like the 1-week price of the memecoin has been approaching the lower level of the pattern in recent days | Source: @ali_charts on X
As is visible above, the 1-week Dogecoin price has witnessed a sharp decline recently and is nearing in on the lower level of the channel situated at $0.16. The last time that the memecoin retested the line was during the last few months of 2024 and it successfully found support back then.
“All eyes on Dogecoin $DOGE! If it holds this level at $0.16 and bounces, a move to $2 could be next!” notes the analyst. This $2 target is roughly around where the asset would meet the middle line of the channel, a level that has also shown interactions with its price in the past. Related Reading Bitcoin Bullish Signal: $900 Million In BTC Leaves Exchanges 3 days ago
It only remains to be seen, though, whether the memecoin will indeed find support and the Ascending Channel will continue to hold. There is always the chance of a breakdown with patterns like these, which, as mentioned earlier, can lead to bearish price action. DOGE Price
At the time of writing, Dogecoin is floating around $0.176, down more than 20% over the last seven days. The price of the coin seems to have been sliding down over the last few days | Source:DOGEUSDT on TradingView Featured image from Dall-E, charts from TradingView.com