Dogecoin To Rally 6,770% If This Pattern Holds: Crypto Analyst
An analyst has explained how Dogecoin could end up witnessing a rally of around 6,770% if this pattern continues to follow for the meme coin.
Dogecoin Has Been Trading Inside A Long-Term Ascending Channel
In a new post on X, analyst Ali Martinez discussed a long-term pattern in which the weekly price of Dogecoin has been trading inside. The pattern in question is the Ascending Parallel Channel from technical analysis.
A Parallel Channel refers to a consolidation pattern that forms when the price of an asset moves inside two parallel trendlines. The upper line is made by joining together successive tops, while the lower one connects bottoms.
While the asset is inside the channel, its likely to face resistance at the top line and support at the bottom one. A break out of either of these levels could imply a continuation of the trend in that direction.
There are three types of Parallel Channels: those parallel to the time axis, those with a positive slope, and those with a negative slope. The first type doesnt have a specific name, but the latter two do; they are known as the Ascending and Descending Parallel Channels, respectively.
Given how these two types have slopped trendlines, they correspond to phases of consolidation in the asset occurring to the upside or downside. Dogecoin has appeared to have been traveling inside one such pattern over the past decade, as the chart shared by the analyst shows.
From the graph, its visible that the 1-week price of Dogecoin has been stuck inside this Ascending Parallel Channel throughout its history. The most recent retest occurred just earlier in the year when DOGE found a rebound off the bottom line.
As Martinez has highlighted in the chart, DOGEs current trajectory is reminiscent of the trend witnessed during the last two bull cycles. In each of those bull runs, the cryptocurrency saw an initial upward burst followed by a small decline that led to the bull rally proper.
Over the last few weeks, Dogecoin has been going down, perhaps indicating that its in that stepping-stone decline phase right now. Going by what happened next in the past cycles, its possible the meme coin would soon start a rally that would find its top at the upper level of the Ascending Channel.
Based on how far away the channels upper level currently is, the analyst has noted that it would take Dogecoin a rally of 6,770% to reach there. It now remains to be seen if the Ascending Channel would continue to hold for the meme coin and if anything similar as in history would take place this time around as well.
DOGE Price
At the time of writing, Dogecoin is floating around $0.32, up over 2% in the last seven days.
Source: NewsBTC.com
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