Dogecoin’s daily chart shows a carefully contested battle with its descending trendline. Analyst Trader Tardigrade highlighted that DOGE has tested this trendline for five consecutive daily candles and remained above it, maintaining the bullish structure.
Momentum is weak, and DOGE needs stronger demand and volume for a sustainable breakout. The descending trendline has repeatedly capped rallies, but recent buying near lower prices shows sellers’ control is fading.
The price finally broke above the trend line and tested it again a few times, using it as a level of support. This “Retested & Held x5” pattern is a sign of accumulation, where the buyers are holding the old resistance level.
Source: X
As long as the price is above this recovered trend line, it is a sign of a base formation, which is normally a precursor to price movements. If the momentum builds up, the price of DOGE may reach the old resistance level of $0.14 to $0.15.
Also Read: Massive Dogecoin (DOGE) Upside Brewing: 10x Potential Ahead
Dogecoin Forms Third Macro Base on Monthly Chart
In the monthly chart, Dogecoin appears to be building its third large base. Analyst Hailey noted that the previous bases resulted in large parabolic movements, and the current base is similar to the previous ones.
In the monthly chart, Dogecoin’s long periods of consolidation with slow accumulation and tight price movements are evident.
The first major base (2014-2017) had a strong downtrend followed by a strong rally in early 2018. The second wave (2018-2020) caused the famous surge in 2021.
Source: X
Both instances were accumulation phases, where the smart money accumulated before major rallies. The current base has higher lows in an uptrend, indicating that the demand is increasing at higher levels.
Historical Patterns Hint at Potential Parabolic Move
Although the structure is improving, it is still necessary to confirm. The daily momentum is not strong, and for the breakout to be valid, it is necessary to have larger trading volumes and close above the previous highs.
Traders should be on the lookout for large volume spikes and strong bullish candles. In the past, Dogecoin could quickly rise if the breakout is valid, similar to previous breakouts.
If the price does not remain above the trend line, it could test the current level again, which could delay the next major breakout.
Also Read: Dogecoin Attempts Reversal as Technical Indicators Signal Potential $0.25 Rally
