Dogecoin (DOGE) has reached a pivotal moment as it faces a major price test. Crypto analyst Ali describes DOGE as “at the edge,” with uncertainty surrounding whether the meme coin will break out or hold firm at support levels.
DOGE’s Price Action and Key Resistance Levels
Ali shared a weekly Dogecoin price chart showing that DOGE trades within an ascending channel. This bullish pattern has a trendline supporting higher lows and a diagonal resistance level connecting the higher highs. As long as DOGE remains within the channel, its price will bounce off the upper and lower boundaries. The more reversals within this range, the more reliable the pattern becomes.
Ali’s analysis highlights that Dogecoin previously rebounded after touching the trendline support of this ascending channel. This trend played out between 2020 and 2021, fueling bullish optimism that history could repeat itself.
At the moment, DOGE has again touched the trendline support, which has historically acted as a launchpad for upward moves. However, the market remains uncertain, making the next few days critical in determining whether Dogecoin will trend higher or break down.
Potential Scenarios for Dogecoin
Bullish Outlook: A Rally Toward Higher Levels
If DOGE holds its support level near $0.16, a breakout rally toward higher resistance levels could follow. Ali’s analysis outlines a potential price target of $6.33 if the pattern holds.
Although the ascending channel pattern suggests bullish momentum, traders should remain cautious. Like all chart patterns, ascending channels can experience false breakouts, where prices initially appear to rise but ultimately retreat into the channel.
Read more: Dogecoin Poised for a $0.59 Breakout? Network Growth Skyrockets 111%!
Bearish Outlook: A Breakdown Below Support
If DOGE fails to hold its trendline support, a bearish move could unfold, leading to potential losses for traders. Recently, Dogecoin found support at $0.143, aligning with the weekly chart’s 200-day simple moving average (SMA). A breakdown below this level could shift market sentiment and trigger further declines.
What’s Next for DOGE?
As Dogecoin hovers at a crucial support level, the market closely monitors whether bulls will take control and ignite a new uptrend. If history repeats itself, DOGE could see a strong upward move. However, if support fails, traders may prepare for a pullback. The next few days will be key in deciding Dogecoin’s next big move.
