An analyst has explained using a pattern that Dogecoin could be off on its next bull run if a certain level can be reclaimed.
Dogecoin Descending Triangle Could Hint At A Bullish Breakout In a new post on X, analyst Ali discussed where DOGE could head next from here. Sharing the below chart, the analyst notes, “Dogecoin is approaching the apex of this multi-year descending triangle formation.”
Looks like the asset’s price is near the upper bound of the triangle right now | Source: ali_charts on X A “descending triangle” pattern is a popular tool used in technical analysis created using two lines. The first line, the upper level, is drawn by connecting consecutive local tops, each lower than the last. The other line, the horizontal level, is made by joining bottoms.
This triangle is often used as a bearish predictor, as the price moves in an overall downward trajectory inside the triangle. A break below the lower level can signify that the bearish downtrend is here to stay for the asset.
However, a breakout above the upper level is generally a bullish sign, with the wider trend observing a reversal. From the chart, it’s visible that Dogecoin has been unable to find any break above this descending triangle pattern that has been stuck inside for more than two years.
The asset has continued to find resistance at the upper level, but the coin hasn’t retested the lower bound for a while now. The memecoin is continuing to stay close to the upper trendline.
As the analyst has mentioned, the asset is now close to the triangle’s end. “A weekly candlestick close above $0.0835 could trigger the beginning of a new DOGE bull run, potentially toward $1,” explains Ali.
Such a rally to $1 from this level would imply returns of almost 1100%, while from the price that DOGE currently trades at, it would be a whopping 1566% jump.
However, the analyst also tells traders to be cautious about the 0.04817 support level, as “any sign of weakness around this level could lead to a new yearly low.”
It remains to be seen how the Dogecoin price will develop shortly, especially given that it’s now fast closing towards the end of the triangle.
DOGE Price Earlier today, false news broke out that the iShares Bitcoin spot ETF was approved by the US SEC, and the cryptocurrency market responded with a sharp rally. As traders realized that the rumor was baseless, the assets all retraced back to the levels they were at before the surge.
The graph below shows that Dogecoin is trading around $0.06 again, having fully retraced the sudden rally.
DOGE has overall moved sideways in the last few days | Source: DOGEUSD on TradingView Featured image from iStock.com, charts from TradingView.com
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Keshav Verma Keshav is a Physics graduate who has been employed as a writer with Bitcoinist since June 2021. He is passionate about writing and through the years, he has gained experience working in a variety of niches. Keshav holds an active interest in the cryptocurrency market, with on-chain analysis being an area he particularly likes to research and write about.