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 recent post on X, analyst Ali Martinez discussed a long-term pattern forming in the weekly price of Dogecoin. The pattern in question is the “Ascending Channel” as identified in technical analysis (TA).
A Parallel Channel is a consolidation pattern in which the price of an asset remains locked between two parallel trendlines. The upper level of the channel typically provides resistance, while the lower line serves as a support point.
Breakouts from either of these trendlines can indicate a continuation of the trend in that direction; thus, breaking above the channel is considered bullish, while dropping below it is deemed bearish.
Parallel Channels can be categorized into three types based on the alignment of their trendlines relative to the coordinate axes. Channels that slope upwards—where trendlines follow higher lows and higher highs—are categorized as Ascending Channels. During the time an asset moves within this type of channel, its price tends to consolidate upwards.
Conversely, channels with a downward slope are labeled as Descending Channels and represent downward consolidation. The third category consists of channels with trendlines parallel to the time-axis, which are generally unnamed.
As illustrated in the chart shared by the analyst, Dogecoin has been trading within an Ascending Channel over the past decade:
The one-week Dogecoin price has recently experienced a sharp decline, approaching the lower level of the channel at $0.16. The last retest of this line occurred in late 2024, where it managed to find support.
“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 approximately at the middle line of the channel, a level that has demonstrated significant interactions with its price history.
However, it remains uncertain whether Dogecoin will indeed find support at this level and whether the Ascending Channel will continue to hold. There is always the potential for a breakdown, especially with patterns like these, which can lead to bearish price movements.
DOGE Price Overview
As of the time of writing, Dogecoin is trading around $0.176, reflecting a decline of more than 20% over the past week.
