One analyst explained how Dogecoin could end up rising approximately 6,770% if this pattern continues to follow the meme coin.
Dogecoin has been trading within a long-term ascending channel
In new mail On Day X, analyst Ali Martinez discussed a long-term pattern in which the weekly price of Dogecoin is trading inward. The pattern in question is the ascending parallel channel from technical analysis.
A parallel channel refers to a consolidation pattern that forms when an asset’s price moves within two parallel trend lines. The upper line is created by connecting successive peaks together, while the lower line connects the troughs.
While the asset is inside the channel, it will likely encounter resistance at the top line and support at the bottom. Breaking either of these levels may mean a continuation of the trend in this 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 has no specific name, but the last two types have a specific name; They are known as ascending and descending parallel channels, respectively.
Given how steep these two types of trend lines are, they correspond to phases of consolidation in an asset that occurs in an up or down trend. Dogecoin appears to have been moving within one of these patterns over the past decade, as the chart shared by the analyst shows.
From the chart, it appears that the 1-week Dogecoin price has been stuck inside this bullish parallel channel throughout its history. The last retest took place earlier in the year when DOGE found a rebound from the final result.
As Martinez highlighted in the chart, DOGE’s current path is reminiscent of the trend we saw during the last two bull cycles. In each of these bullish moves, the cryptocurrency saw an initial bullish rally followed by a small decline that led to the correct bullish rally.
Over the past few weeks, Dogecoin has been declining, which may indicate that it is in this decline phase at the moment. Considering what happened next in the past sessions, it is possible that the meme coin will soon start a rally that will peak at the upper level of the ascending channel.
Based on how far away the upper level of the channel currently is, the analyst noted that it would take Dogecoin to rise 6,770% to get there. It now remains to be seen whether the rising channel will continue to hold the meme coin and whether anything similar as happened in history will happen this time as well.
Doji price
At the time of writing, Dogecoin is trading around $0.32, up more than 2% in the past seven days.