One analyst has explained how Dogecoin could end up witnessing a rally of around 6,770% if this pattern continues for the meme coin.
Dogecoin has been trading within a long-term ascending channel
in a new mail In X, analyst Ali Martinez analyzed a long-term pattern where the weekly price of Dogecoin has been trading inwards. The pattern in question is the Ascending Parallel Channel of technical analysis.
A parallel channel refers to a consolidation pattern that forms when the price of an asset moves within two parallel trend lines. The upper line is formed by joining successive peaks, while the lower one connects lower ones.
As long as the asset is within the channel, it is likely to face resistance on the upper line and support on the lower line. A break of any 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 does not have a specific name, but the last two do; They are known as ascending and descending parallel channels, respectively.
Since these two types have sloping trend lines, they correspond to consolidation phases in the asset that occur upwards or downwards. Dogecoin appears to have been traveling within one of those patterns for the past decade, as the chart shared by the analyst shows.
From the chart, you can see that Dogecoin’s 1-week price has been stuck within this ascending parallel channel throughout its history. The most recent retest came just at the beginning of the year, when DOGE found a rebound in results.
As MartÃnez highlighted in the chart, DOGE’s current trajectory is reminiscent of the trend seen during the last two bull cycles. In each of those bull runs, the cryptocurrency saw an initial rise followed by a small drop leading to the bull rally itself.
In recent weeks, Dogecoin has been falling, perhaps indicating that it is in that decline phase right now. Considering what happened next in the past cycles, the meme coin may soon begin a rally that would find its peak at the upper level of the Ascending Channel.
Based on how far the upper level of the channel currently is, the analyst has noted that it would take a 6,770% rally for Dogecoin to get there. Now it remains to be seen if the Ascending Channel would continue to resist the meme coin and if something similar to the story would happen this time as well.
DOGE Price
At the time of writing, Dogecoin is trading around $0.32, up more than 2% in the last seven days.
