An analyst has pointed out how a Dogecoin breakout could be coming, based on this technical pattern that the asset has followed over the years.
Dogecoin Is Currently Inside Accumulation Zone Of Long-Term Channel
In a new post on X, analyst Ali Martinez has talked about how Dogecoin is still in the accumulation phase of a technical analysis (TA) channel. The pattern in question is an “Ascending Channel,” a type of Parallel Channel.
Parallel Channels form when the price of an asset travels between two parallel trendlines. There are a few different variations of the pattern, depending on how the trendlines are oriented with respect to the chart axes. The Ascending Channel, the type that’s of interest in the context of the current discussion, involves trendlines that are sloped upward. That is, these channels correspond to a phase of upward consolidation in an asset’s price.
The upper line of the pattern tends to be a source of resistance, while the lower one is a source of support. Either of these levels not holding up can imply a continuation of the trend in that direction. This means that a surge above the channel could signal a bullish breakout, while a fall below it may lead to bearish action.
Now, here is the chart shared by Martinez that shows the Ascending Channel that the 1-week price of Dogecoin has followed over the past decade:
As displayed in the above graph, Dogecoin slipped below the support line of the Ascending Channel earlier in the year. This fall, however, didn’t immediately confirm a bearish breakdown, as the memecoin has seen a few instances over its history where temporary declines below the line have taken place.
During each of them, the coin ended up finding support in a zone bounded by the channel’s lower level and another parallel support line just some distance below.
From the chart, it’s visible that this same pattern could be playing out once more, as the asset has stabilized since entering this historical “accumulation” phase. For now, the coin is still trading inside this zone, but a surge back into the Ascending Channel could eventually arrive, if the past pattern is anything to go by.
Each of the previous returns into the channel led to notable gains for Dogecoin. “The breakout is coming,” says the analyst. “Stay alert!”
Another altcoin, Chainlink (LINK), has also been following an Ascending Channel recently, as Martinez has pointed out in another X post.
As is visible in the chart, Chainlink’s 3-day price is currently trading near the mid-line of its multi-year long Ascending Channel. The analyst believes a surge to $47 could be next for the coin, corresponding to the upper line of the pattern.
DOGE Price
At the time of writing, Dogecoin is trading around $0.255, up more than 13% over the last week.
Featured image from Dall-E, charts from TradingView.com
