Dogecoin is experiencing a significant downturn of 11.8% and 20% over the last 24 hours and the past week, respectively, and may soon test the support at the $0.30 price mark. In spite of this drop, Trader Tardigrade, a prominent technical analyst on the social media platform X, has pointed out a symmetrical triangle developing on DOGE’s daily candlestick chart. This traditional technical formation is frequently a harbinger of considerable price fluctuations, and a breakout could lead to the revival of an upward trend.
Dogecoin Developing A Symmetrical Triangle
Trader Tardigrade suggests that Dogecoin appears to have been trading within a symmetrical triangle over the last week. This symmetrical triangle formation resulted from Dogecoin’s price adjustment, which commenced after it hit $0.43 on January 18.
Based on the daily candlestick chart, the majority of candlestick bodies have remained within the limits of this triangle since January 20. During the first two days of the pattern’s formation, a few wicks briefly pierced above the upper trendline, but Dogecoin’s price swiftly reverted back into the pattern. Since then, the price has formed a series of lower daily highs and higher daily lows, reflecting diminishing selling pressure and an equilibrium between the buyers and sellers.
The price action has successfully moved toward the apex of the triangle, and Trader Tardigrade indicates that a breakout could be advantageous for the bulls, driving the price considerably higher.
What If DOGE Breaks Out of the Triangle?
Should Dogecoin break above the upper trendline of the symmetrical triangle, it could point to a resurgence of the bullish trend. Trader Tardigrade forecasts that this breakout could set Dogecoin on a trajectory toward a price target of no less than $0.45.
Nevertheless, rather than moving upwards, Dogecoin has recently fallen below the lower trendline of the symmetrical triangle, redirecting its path downward towards support at $0.31. This price point has shown to be a crucial liquidity zone over the past 30 days. Indeed, $0.31 has acted as a dependable support level, with Dogecoin bouncing back from this price three times amid recent downturns. The most significant rebound took place on January 13, when Dogecoin surged off the $0.31 level and subsequently climbed to a peak of $0.4318.
The next question now is whether DOGE can replicate this pattern by bouncing back again at $0.31. A successful rebound at this vital support level would signify that buyers are stepping in to support and provide Dogecoin the required momentum to continue its upward trend. If the rebound gathers enough strength, it could restore confidence in DOGE’s bullish perspective and prepare the ground for a renewed attempt at surpassing the $0.45 price mark. Until then, $0.31 remains a pivotal level to monitor as the meme coin assesses the determination of buyers.
Featured image from Unsplash, chart from Tradingview.com
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