Dogecoin Tests Channel Floor Again: Breakdown Or Rebound?

Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and publishing How Our News is Made Strict editorial policy that focuses on accuracy, relevance, and impartiality Ad discliamer Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio. A cryptocurrency analyst has pointed out how Dogecoin has returned to the support level of a Parallel Channel following the latest market decline. Dogecoin Is Potentially Following A Parallel Channel In a new post on X, analyst Ali Martinez has talked about how Dogecoin is currently trading with respect to a Parallel Channel . This type of technical analysis (TA) pattern forms whenever an asset moves between two parallel trendlines. Related Reading Bitcoin Price Back At $63,000 Despite 1.2 Million BTC Absorption 1 day ago The upper level of the channel can act as a source of resistance, while the lower can provide support. Together, the trendlines keep the price locked between them. If either of these levels fails, then the price may see a continuation of the trend in the direction of the break. That is, a surge above the pattern can be a bullish signal, while a fall under it is a bearish one. Parallel Channels can be divided into a few different categories based on how the channel is oriented with respect to the graph axes. The “ Ascending Channel ” forms when the trendlines point up, while the “ Descending Channel ” involves a negative slope. In the context of the current topic, the third and simplest type is of interest: a Parallel Channel that’s parallel to the time-axis. This pattern corresponds to a phase of true sideways consolidation in the asset. Now, here is the chart shared by Martinez that shows the Parallel Channel that the daily Dogecoin price has been trading inside over the past few months: The price of the coin seems to have declined inside the channel in recent days | Source: @alicharts on X As displayed in the above graph, Dogecoin retested the upper level of the Parallel Channel in May, but ended up finding rejection. Since then, the memecoin has sharply moved down the width of the channel, reaching the bottom level. During this descent, the asset not only broke under the support of the midway level, but it also lost the 50-day moving average (MA). With DOGE now retesting the lowest trendline of the channel, it remains to be seen how the asset will develop in the coming days. “As long as this support holds, I think a recovery toward $0.1019 and $0.1156 remains likely,” noted the analyst. “A breakdown, however, could expose the next major supply zone near $0.067.” Related Reading Bitcoin Traders Turn Most Fearful In 2 Months Following Crash 2 days ago While Dogecoin has still not broken out of its Parallel Channel, another altcoin, Cardano, has seen a different outcome. As Martinez has highlighted in another X post , the weekly ADA price has fallen under the support level of a long-term channel recently. The Parallel Channel that the weekly ADA price was following | Source: @alicharts on X Parallel Channel breakouts are often assumed to be of the same length as the width of the channel. Based on this, the analyst explained, “For Cardano $ADA, my targets are $0.11 and $0.051.” DOGE Price Following the latest continuation of the drawdown, Dogecoin has reached the $0.843 level. The trend in the price of the coin over the last five days | Source: DOGEUSDT on TradingView Featured image from Dall-E, chart from TradingView.com