A crypto analyst has pointed out how Dogecoin has remained stuck in a Descending Triangle recently, decompression from which could potentially trigger a notable move.
Dogecoin Has Continued To Coil Inside A Descending Triangle
In a new post on X, analyst Ali Martinez has shared a Descending Triangle pattern that has recently been forming in the 4-hour price chart of Dogecoin. The Descending Triangle is a triangular consolidation channel from technical analysis (TA) that forms when an asset travels between two converging trendlines to a net downside.
A key feature of the pattern is that the lower trendline is parallel to the time-axis. Thus, as the price moves through the channel, the upper end of its range progressively gets smaller.
Like other consolidation patterns in TA, the upper trendline of a Descending Triangle is also assumed to be a source of resistance, while the lower one that of support. A break out of either of these boundaries can imply a continuation of trend in that direction.
The Descending Triangle is just one type of triangle that exists in TA. Another popular pattern is the Ascending Triangle, which involves the reverse case: a flat upper barrier and an ascending support line.
Now, here is the chart shared by Martinez that shows the Descending Triangle that Dogecoin has been stuck inside on the 4-hour timeframe recently:
As displayed in the above graph, Dogecoin has gradually been making its way down in the shape of the Descending Triangle over the last couple of months. The asset has retested both trendlines multiple times, but so far, it hasn’t been able to find a break.
The analyst initially shared the pattern last week, but between then and now, not much has changed for DOGE, as it remains firmly trapped in the channel. In that last post, Martinez noted that this triangle could pave the way to a move of about 29% for the memecoin.
Triangle breakouts are often assumed to lead to moves equal in degree to the height of the triangle; the DOGE Descending Triangle involved a swing of 29% between its highest and lowest points, hence the analyst’s figure for the breakout.
Currently, it’s unclear when Dogecoin could escape the channel, but as is visible in the chart, the asset is slowly approaching the apex of the triangle. In this region, consolidation is tight, so breakouts can become more likely to take place. It now remains to be seen which direction the coin will exit the channel and whether any sustained move will follow.
DOGE Price
At the time of writing, Dogecoin is floating around $0.093, up over 2% in the last 24 hours.
Source: https://www.newsbtc.com/dogecoin-2/dogecoin-trapped-triangle-29-move-brewing/
