As the price of Dogecoin (DOGE) tries to hold a crucial support level, one analyst flagged potentially bullish technical setups that could set the stage for a big move in the coming months.
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Historical design of Dogecoin aims for enormous expansion
On Wednesday, Dogecoin continued its sideways trajectory between the local range of $0.100-$0.105. The cryptocurrency has been trading in this area for the past four days, after recovering from a one-month low of $0.097 recorded on Saturday.
Amid this performance, market observer Trader Tardigrade shared a bullish outlook for the cryptocurrency, analyzing the DOGE chart on multiple time frames. He pointed to a “textbook” falling wedge in the daily time frame that has formed since early May.
The analyst claimed that this pattern is “one of the most reliable bullish reversal patterns,” with the breakouts “almost always leading[ing] to an explosive lead.” Dogecoin has been compressing within this pattern for a few weeks and is currently near the top while also retesting the upper boundary of the formation.
Based on this, the analyst suggested that DOGE is “rolled and ready” for a breakout and potential rally to at least the May highs. Trader Tardigrade too shared the memecoin’s monthly chart, confirming that “a huge wave is coming.”
He claimed that Dogecoin appears to be repeating a setup that has previously led to explosive performance. According to the chart, the cryptocurrency is forming a new solid fundamental structure, indicating that a breakout and rally to new highs could begin in the coming months. Notably, this structure was formed before the All Time High (ATH) rallies of 2017 and 2021.
As the new multi-year base develops, the analyst will declared that DOGE is in “the best accumulation period, adding that” every time DOGE entered an accumulation zone, it consolidated sideways before exploding into a parabolic rally. He claimed that this pattern has occurred in 2015-2017, 2019-2020, 2023-2024 and “always leads to an explosion.”
DOGE’s short-term fate hangs in the balance
In an X-post, market watcher Ali Martinez says confirmed that Dogecoin “seems poised for a deeper price correction.” As he noted, the cryptocurrency has traded between $0.088 and $0.115 over the past three months, forming a parallel channel.
During the April-May market rally, the leading memecoin was able to climb from the lower half of the channel to the upper limit, briefly breaking above this crucial resistance in mid-May before retreating again.
After the latest rejection, the cryptocurrency fell to the mid-range of the channel, around $0.102, and fell below this level during last week’s pullback. This area corresponds to the 50-day Simple Moving Average (SMA), which has served as key support during the recent market recovery.
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Therefore, the analyst emphasized the importance of this level and stated that if it holds, investors could expect a recovery to the top of the channel. On the contrary, he warned that if Dogecoin falls below this level, a retest of the channel’s lower limit would be likely.
At the time of writing, DOGE is trading at $0.101, down 2.4% in the weekly time frame.
Featured image from Unsplash.com, chart from TradingView.com