An analyst has shed light on a scenario where Dogecoin might experience a significant upward trend if a particular support level holds firm within its current pattern.
Dogecoin’s Dance with the Ascending Channel
In a fresh analysis shared on the platform X, Ali Martinez, an analyst, has identified a long-term Ascending Channel shaping the weekly price movements of Dogecoin over the years. This "Ascending Channel" in technical analysis represents a situation where an asset’s price consolidates with a tendency to rise, snuggly fitting between two parallel lines that slowly drift upwards.
The upper boundary of this channel is drawn through a series of increasing highs, while the lower boundary connects a sequence of rising lows. As long as the price oscillates between these lines, it tends to encounter resistance at the upper level and find support at the lower one.
When either of these boundaries is breached, the asset often continues its trend in the direction of the break. A breach above the channel suggests bullish tendencies, while breaking below could signal bearish momentum.
Besides the Ascending Channel, there’s also the Descending Channel, where the price likewise consolidates but leans toward a downward trajectory. Aside from this directional difference, it behaves like its counterpart.
There’s yet another form, a parallel channel where consolidation happens sideways, making the trendlines not just parallel to each other but also aligned with the time axis.
Here, take a look at the chart Martinez shared. It captures how Dogecoin’s weekly price has been navigating within the Ascending Channel for nearly ten years:
As depicted in the chart, Dogecoin recently took a sharp tumble toward the lower line of this Ascending Channel. Just last year, the coin tested this same line and bounced back successfully, sparking an uptrend.
While it’s plausible that the support line might hold again for Dogecoin, it’s premature to jump to conclusions. The last encounter saw the coin hovering near the line for a while before a bullish surge kicked in.
This latest test of the support has occurred amid a broader crash shaking the cryptocurrency market, stirring anxiety among investors. Nevertheless, as long as DOGE stays within the Ascending Channel, the token’s enthusiasts might still have room for optimism. As Martinez puts it, "Dogecoin $DOGE still has a chance to go parabolic if the $0.16 support level holds!"
DOGE Price Update
In recent days, Dogecoin has taken a notable hit, ranking among the most severely affected top cryptocurrencies, with its price dropping nearly 17% to settle around $0.17.
