Analyst Sets New Price Targets
Cryptocurrency analyst Balo (@btcbalo) has Highlight A major technical breakout on the Dogecoin (DOGE/USD) chart points to a bullish trend in the near term. Balo’s analysis based on the 4-hour chart points to several key technical developments that are fueling expectations for continued gains in Dogecoin’s price.
Why Dogecoin looks set to rise
The cornerstone of Balo’s assessment centers on Dogecoin’s decisive break above the long-term downtrend line on December 28. Originally established from the $0.48 top on December 8, this downtrend line served as a strong resistance level, effectively determining Dogecoin’s price action throughout December.
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A break above this trendline marks a critical turning point. Following this rally, Dogecoin experienced a minor pullback, in which the meme coin quickly retested the broken trendline. However, the retest was successful, reinforcing Dogecoin’s bullish outlook.
Supplementary breakthrough downtrend The line is the breakdown of a descending triangle pattern formed since December 21st. Descending triangles are characterized by a series of lower highs converging with relatively flat support and often signal a potential bearish continuation.
However, Dogecoin’s ability to break out of this pattern today, January 2, signals a shift in market sentiment. The emergence of a descending triangle, coupled with a breakout, reinforces the bullish narrative, although a retest of the triangle’s upper boundary could further validate this uptrend.
Also integral to Balo’s big breakout thesis is the Volume Profile, which provides a nuanced look at trading activity at different price levels. Dogecoin has rebounded from substantial support around $0.32 in the highest volume cluster, indicating strong fundamentals for Dogecoin Accumulated transaction interest.
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On the bright side, volume has been light until the $0.40 area, where there is a huge cluster as high as $0.43. This accumulation means that DOGE is likely to encounter minimal resistance above this area, paving the way for Dogecoin to target the yearly high of $0.4834 set on December 8.
The completion of the ABC pattern on the Dogecoin chart further strengthens the bullish outlook. The ABC pattern is a corrective sequence in technical analysis that usually signals the end of a pullback phase and the continuation of the previous trend. In the case of Dogecoin, the model was finalized to fit seamlessly into the others bullish indicators From breakout and volume analysis.
Therefore, Balo’s statement that “DOGE (is) starting to break out and I don’t see any reason to stop now. There will be new highs soon” could be an indication that DOGE is on its way to new highs.
At press time, DOGE was trading at $0.34.
Featured image created using DALL.E, chart from TradingView.com
