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Dog-themed cryptocurrency Dogecoin (DOGE) is currently at a critical juncture as it faces a big price test. According to crypto analyst Ali, DOGE is "at the edge," with the question now whether Dogecoin will break out or stand firm.
Ali shared a Dogecoin weekly price chart that showed price trading in an ascending channel, a bullish chart pattern defined by a trend line supporting a series of higher lows and a diagonal resistance level connecting the higher highs. When in the channel, prices are expected to bounce off both upper and lower boundaries; the more such reversals occur, the more reliable the pattern.
Ali’s analysis shows that Dogecoin rebounded when it touched the trendline support of the ascending channel. This instance was seen from 2020 to 2021, giving bullish traders hope for a rally if history repeats itself.
Gamza KhanzadaevCurrently, DOGE has touched the trendline support, which has previously served as a potential launchpad for an upward move. However, the market remains uncertain, and the next few days might be crucial in determining where Dogecoin trends next.
Potential scenarios
If DOGE successfully holds the support level with a range near $0.16, a rally toward higher resistance levels may be in the cards. Ali's chart highlighted a target of $6.33.
Tomiwabold OlajideWhile positive expectations remain on the ascending channel pattern, it should be borne in mind that just like all the other patterns, channels might be prone to false or premature breakouts, which means that prices may retreat back into the channel.
On the other hand, a breakdown below the trendline support might set off a bearish move, perhaps resulting in losses for traders. Dogecoin recently found support at $0.143, which corresponds to the SMA 200 on the weekly chart.
As it is, the market is closely watching the charts to see if the bulls will seize control and kickstart a fresh uptrend for the Dogecoin price.
Vladislav Sopov
Dan Burgin