A crypto analyst has pointed out how Dogecoin might have to hold above $0.1020 to avoid a retest of a Parallel Channel’s lower level.
Dogecoin Could Be Following A Parallel Channel
In a new post on X, analyst Ali Martinez has talked about a support region that Dogecoin is retesting right now. The region in question includes two lines: a simple moving average (SMA) of the daily spot price and the middle level of a Parallel Channel.
A Parallel Channel is a pattern from technical analysis (TA) that appears whenever an asset trades between two parallel trendlines. Such channels can be of a few different types depending upon how the trendlines are oriented with respect to the graph axes, but in the context of the current topic, the simplest variant is of interest: one that has its channel parallel to the time-axis.
The upper level of a Parallel Channel is assumed to be a source of resistance for the price. Similarly, the lower level can act as a support cushion. As the price trades between these trendlines, it experiences a phase of true sideways movement.
When a break occurs past either trendline, the cryptocurrency may experience a sustained move in that direction. That is, a surge above the resistance level can be a bullish sign, while a drop under support a bearish one.
Now, here is the chart shared by Martinez that shows the Parallel Channel that the 1-day price of Dogecoin has potentially been trading inside over the last few months:
As displayed in the above graph, Dogecoin retested the upper level of this Parallel Channel earlier in the month and found rejection. Since then, the memecoin has retraced back to the middle level of the channel, sitting halfway through the length of the channel.
This line, located around $0.1020, could end up being a potential center of support for DOGE. Interestingly, the Parallel Channel’s middle level isn’t all that’s situated at this level. From the chart, it’s visible that the 50-day SMA of the asset’s spot price also intersects here. “This alignment makes $0.1020 a prime level to watch,” noted the analyst.
Considering the setup, it now remains to be seen how Dogecoin’s retest of the region will play out. “If the buyers defend it, we can expect a rebound toward the top of the channel at $0.1156,” said Martinez. “However, if DOGE dips below this level to flush out late leverage, I’m watching the channel’s lower boundary at $0.0883.”
The upper level of $0.1156 is currently 13% above the DOGE spot price, while the support boundary of $0.0883 is 13% below.
DOGE Price
Dogecoin has dropped to the $0.1022 mark following its recent price action.
