An analyst has pointed out how Dogecoin has entered into a zone that kicked off major bull runs for the memecoin in the past.
Dogecoin Is Trading Near Lower Level Of Historical Ascending Channel
In a new post on X, analyst Ali Martinez has talked about how the weekly Dogecoin price has entered into a historically important buy zone. Below is the chart shared by Martinez, showing this trend.
As is visible in the graph, the Dogecoin weekly price has roughly followed an Ascending Channel over the past decade. The “Ascending Channel” here refers to a technical analysis (TA) pattern that forms when an asset trades between two parallel trendlines angled upward.
The upper line of the pattern tracks successive higher highs in the price, while the lower one connects higher lows. The former is considered to be a source of resistance and the latter that of support.
Though, while this may be so, Dogecoin has dipped under the lower line of its long-term Ascending Channel a few times over the years, with the latest instance coming this year.
That said, in each of these occurrences, the asset found support at a trendline a bit below the Ascending Channel’s lower level. The analyst has described the shaded area between the two lines as a “historically strong buy zone.”
From the chart, it’s apparent that multiple major bull runs in DOGE found their start after the price retested this zone. At present, the token is trading inside the area, with recent attempts to re-enter the Ascending Channel ending up in failure.
It now remains to be seen whether a breakout into the channel would follow for Dogecoin and potentially kick off another rally, or if this cycle would break the pattern.
The Ascending Channel is just one type of pattern with parallel trendlines that exists in TA. When the asset’s consolidation occurs toward the downside instead, the formation is known as a Descending Channel.
As pointed out by Martinez in another X post, another memecoin, Pudgy Penguins (PENGU), has broken out of such a channel recently.
As displayed in the above chart, the 1-hour price of Pudgy Penguins was sliding down inside the Descending Channel during the last two weeks, but it has just found a surge above its resistance line. “PENGU targets $0.041 after breaking out of a descending channel!” says the analyst.
DOGE Price
At the time of writing, Dogecoin is trading around $0.21, up almost 4% over the last 24 hours.
