A cryptocurrency analyst has pointed out how Dogecoin has seen its last five breakout attempts rejected by the middle line of a Parallel Channel pattern.
Dogecoin May Have Been Following A Parallel Channel Recently
In a new post on X, analyst Ali Martinez has talked about a Parallel Channel forming in the 4-hour price of Dogecoin. The “Parallel Channel” refers to a class of patterns from technical analysis (TA) that emerge whenever an asset observes consolidation between two parallel trendlines.
The upper line of the channel is likely to be a source of resistance for the price, while the lower one that of support. A break out of either of these bounds can signal a continuation of trend in that direction.
Depending on how the trendlines are oriented with respect to the graph axes, Parallel Channels can be sorted into a few different types. When the trendlines are pointing up, the pattern is known as an Ascending Channel. Similarly, a channel with a negative slope is called a Descending Channel. These two channels correspond to a phase of consolidation to a net upside and downside, respectively.
In the context of the current topic, the Parallel Channel of interest falls into a third type: one where the trendlines are parallel to the time-axis. This type of channel naturally represents a phase of completely sideways movement in the asset.
Now, here is the chart shared by Martinez that shows the Parallel Channel that the 4-hour price of Dogecoin has potentially been trading inside over the last couple of months:
As displayed in the above graph, Dogecoin has recently been stuck in the lower half of this Parallel Channel. The memecoin has made five retests of the midway line, but all of these attempts have ended up in rejection.
This level is located at $0.1018. DOGE’s most recent retest of the line took place just last week. Since this latest rejection, the cryptocurrency has retraced to the quarter mark of the channel. It now remains to be seen whether the coin will see another run to the resistance line or if it will retest the support level at $0.0884 instead next.
In some other news, Dogecoin witnessed a high amount of transaction volume last week, as the analyst has highlighted in another X post.
From the chart, it’s visible that the Dogecoin network saw almost $800 million in transfer volume on April 16th alone. Thus, it would appear that activity related to the memecoin was elevated last week.
DOGE Price
Dogecoin has dropped back to the $0.0966 mark following its pullback.