Dogecoin, the well-known meme-inspired cryptocurrency, holds the promise of significant gains, as noted by crypto analyst Ali. In a recent tweet, Ali highlighted that DOGE is nearing the apex of a substantial multi-year descending triangle pattern on its chart.
Descending triangle patterns are often seen as bearish formations that tend to precede a breakdown. Nevertheless, Ali suggests that if Dogecoin manages to secure a weekly chart close above the $0.0835 resistance level, it could trigger a fresh bull run aiming for $1.
There is a Clause
Ali cautions that there’s a crucial condition attached to this scenario. If Dogecoin fails to hold its ground around the $0.0482 support level on the weekly chart, it could risk breaking down, potentially reaching new lows for the year.
In essence, Dogecoin finds itself at a crossroads. A weekly close above $0.0835 could serve as the launchpad for a new bullish trend in DOGE. Conversely, an inability to maintain levels above $0.0482 might trigger further downside moves.
Dogecoin has been in a prolonged bear market since 2021, mirroring the broader crypto downturn. Like many other altcoins, it has grappled with dwindling investor interest and scepticism surrounding cryptocurrencies as an asset class.
Nevertheless, crypto analysts like Ali see promise in DOGE’s technical setup on the charts, indicating the potential for a turnaround. The apex of the descending triangle pattern often precedes significant price movements in one direction or the other.
For DOGE enthusiasts, the question remains: Can the meme coin muster the momentum to break out of its triangular formation on the upside, or will bearish pressures prevail, leading to a breakdown?
Dogecoin Technical Analysis Shows Bearish Momentum
AltFINS, a crypto analytics firm, has analysed DOGE’s price, and the results are painting a distinctly bearish picture across short-, medium-, and long-term timeframes.
This analysis highlights a bearish breakout from a descending triangle pattern, which exposes significant downside potential for Dogecoin. The cryptocurrency recently slipped beneath a crucial support level at $0.060, putting it at risk of descending toward the next support area around $0.053.
Examining essential momentum indicators, the daily MACD line is positioned below the MACD signal line, indicating the development of negative momentum. Furthermore, the relative strength index (RSI) is below 45, signalling exceptionally bearish momentum.
With the breach of triangle support, the prevailing direction favours the downside. There are limited indications of bullish momentum on the charts, suggesting a potential trend reversal isn’t in the immediate future.
On the positive side, DOGE confronts resistance zones at $0.060, $0.070, and $0.100. Shifting the overall multi-week trend from bearish to bullish requires a sustained breakthrough in these areas.
Dogecoin investors are urged to exercise caution and await technical signals of a trend reversal before making any bottom calls. The prevailing price action and momentum indicators indicate a bias toward further declines.