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Cryptocurrency analyst Balo (@btcbalo) has Highlight A major technical breakout on the Dogecoin (DOGE/USD) chart indicates an uptrend in the near future. Balo’s analysis, based on the 4-hour chart, points to several key technical developments driving expectations for continued upward movement of the Dogecoin price.
Why Dogecoin Looks Like It’s Poised to Rise
The cornerstone of Balo’s assessment focuses on Dogecoin’s decisive breakout of the long-term downtrend line on December 28. This downtrend line, originally established from the December 8 high at $0.48, served as a massive resistance level, effectively forcing DOGE’s price movements throughout December.
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A break above this trend line represents a critical turning point. After this rally, Dogecoin saw a slight bounce as memecoin quickly retested the breached trend line. However, the retest was successful, reinforcing Dogecoin’s bullish outlook.
Completing the breakout from the downtrend line is the breakup of the descending triangle pattern that has been forming since December 21st. A descending triangle is characterized by a series of converging lower highs with a relatively flat support level, often indicating a potential downward continuation.
However, Dogecoin’s ability to break out of this formation today, on January 2, indicates a shift in market sentiment. The emergence from the bearish triangle, coupled with the breakout, reinforces the bullish narrative, although a retest of the upper boundary of the triangle could provide further validation of this uptrend.
The volume profile is also an integral part of Balloo’s thesis on a major breakout, which provides an accurate understanding of trading activity at different price levels. Dogecoin rebounded from significant support in the higher volume group around $0.32, indicating a strong base of accumulating trading interest.
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To the upside, trading volume is thin until the $0.40 area, where there is a huge block up to $0.43. This rally indicates that above this area, DOGE may face minimal resistance, paving the way for Dogecoin to target the yearly high at $0.4834, recorded on December 8.
Reinforcing the bullish outlook is the completion of the ABC pattern on the Dogecoin chart. The ABC pattern is a corrective sequence in technical analysis that usually indicates the end of the rebound phase and the continuation of the previous trend. In the case of Dogecoin, the completion of this pattern aligns seamlessly with other bullish indicators derived from breakout analysis and trading volume.
Hence, Ballu’s observation “DOGE is starting to show, I see no reason to stop now. Real new highs soon” may indicate that DOGE is heading towards a new high.
At press time, DOGE was trading at $0.34.
Featured image created with DALL.E, a chart from TradingView.com