Dogecoin Potential Breakout Analysis

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 discussed that 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 various versions of the pattern, depending on how the trendlines are oriented concerning the chart axes. The Ascending Channel, the type of interest here, involves trendlines sloped upward, indicating upward consolidation in the asset’s price.

The upper line typically serves as a source of resistance, while the lower one acts as a source of support. Failure to hold either level may suggest a continuation of the trend in that direction. Surging above the channel could signal a bullish breakout, while falling below it may lead to bearish action.

Here is the chart shared by Martinez showing the Ascending Channel that the 1-week price of Dogecoin has followed over the past decade:

As seen in the graph, Dogecoin slipped below the support line of the Ascending Channel earlier in the year. However, this drop didn’t immediately confirm a bearish breakdown, as the memecoin has historically experienced temporary declines below the line.

In those instances, the coin eventually found support within a zone bounded by the channel’s lower level and another parallel support line below it.

This pattern could be repeating, as the asset has stabilized since entering this historical “accumulation” phase. Currently, the coin is still trading within this zone, but a surge back into the Ascending Channel could happen, following past trends.

Each previous return to the channel resulted in 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 noted by Martinez in another X post.

Chainlink’s 3-day price is currently trading near the mid-line of its multi-year Ascending Channel. The analyst predicts a surge to $47 could be possible, aligning with the upper line of the pattern.

DOGE Price

At the time of writing, Dogecoin trades around $0.255, up more than 13% over the last week.

Featured image from Dall-E, charts from TradingView.com