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Martinez's commentary focuses on a chart pattern known as the “descending triangle.” This is a bearish formation that occurs when the price follows a downward trend line that intersects a flat support line. Typically, this pattern indicates a continuation of a downtrend, but in the context of Dogecoin, Martinez points out that it precedes significant upward breakouts.
“The ongoing correction of Dogecoin price is part of its usual behavior before massive spikes! Let’s dig deeper,” Martinez shared. He explained the historical significance of this pattern in Dogecoin trading history: “In 2017, DOGE broke out of a descending triangle. After that, DOGE fell 40% before entering a 982% bull run!
Martinez also analyzed more recent cycles to reinforce his observations, saying: “In 2021, DOGE broke out of the descending triangle again. After that, DOGE fell 56% before rising 12,197%!” According to Martinez, these corrections are not random but characteristic of how Dogecoin behaved in previous cycles, paving the way for massive gains.
The analyst drew parallels with current market conditions: “Now, in 2024, DOGE has once again exited the descending triangle! It is currently undergoing a 47% price correction, very similar to previous cycles, which could ignite the next DOGE bull run!” This confirmation suggests that the current market decline may be an appropriate buying moment ahead of potential gains.
Martinez's analysis emphasizes the cyclical nature of Dogecoin's price movements, suggesting a pattern of sharp declines followed by significant recoveries. “Over the years, Dogecoin seems to be reversing its previous bull cycles! All you need is a little patience,” he concluded.
Dogecoin short-term price analysis
Amid this optimistic forecast, Dogecoin price is experiencing a risky scenario in the short term. Since mid-April, DOGE has seen significant technical resistance. In particular, DOGE price has been consistently rejected at the 50-day EMA on multiple instances, indicating strong selling pressure at higher price levels.
Amid a broader market pullback, the trajectory was confirmed when Dogecoin's price fell below the crucial 100-day moving average. This level, which traders often watch for signs of medium-term market direction, had previously provided support. A breakout underscores weak market sentiment and could indicate extended losses.
As of press time, Dogecoin price was hovering near $0.1259 after settling narrowly above the 200 EMA yesterday, a major psychological and technical barrier. This moving average is now a pivot point for Dogecoin; Its sustained breakout on the daily chart could significantly change the market structure, which could lead to a slide towards the $0.1005 support level.
The Relative Strength Index (RSI) is at 31.63, approaching oversold territory but not conclusively indicating an imminent reversal. This indicates that while the market is approaching oversold conditions, the selling pressure has not completely subsided. A final move may be necessary to bring DOGE into “oversold” territory in order to establish a local bottom.
Featured image created with DALL·E, chart from TradingView.com
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