Crypto analyst Kevin has spotted a bullish pennant pattern on the 4-hour chart of Dogecoin (DOGE). According to him, this pattern points to a possible large price move by Saturday. In a post on Something to keep an eye on!”
What is a bull pennant?
A bull pennant is a classic technical pattern seen as a pause in an uptrend, often followed by a continuation of the increase. The pattern emerges after a strong price increase, after which the price temporarily consolidates with decreasing volatility, characterized by converging trend lines.
In Dogecoin’s case, the pennant pattern is formed by yellow trend lines that indicate a period of consolidation. DOGE is currently trading around $0.39 within this pattern. According to Kevin, there is a good chance that an outbreak will occur before Saturday.
Important price levels
The chart highlights some crucial support and resistance levels:
- Resistance: Around $0.54 – this level could be tested on a breakout to the upside.
- Support: Around $0.33 and $0.295 – these levels would become critical in the event of a downside break.
A breakout occurs when the price breaks through the trend lines, which often signals a strong price movement. However, Kevin remains cautious and emphasizes the uncertainty of the market: “It could go up or it could go down.”
Role van stochastic RSI
An important tool in Kevin’s analysis is the stochastic Relative Strength Index (RSI). This indicator compares the current RSI level with the highest and lowest values over a period of time. This provides insight into possible overbought or oversold conditions.
According to Kevin, the daily stochastic RSI for Dogecoin has almost reached a “reset”, meaning that previous overbought conditions have cooled. He estimates that this reset will be complete within a week, after which another upward move becomes likely: “The daily RSI will probably need a few more days to fully reset. Once that happens, I expect the next surge to begin.”
Why consolidation is important
Kevin emphasizes that a longer period of consolidation often results in a larger price move: “The longer Dogecoin consolidates, the bigger the next move will be. In my view, the next move will be the biggest move of this bull run and will show us where Dogecoin can reach its peak for this cycle.”
What does this mean for the Dogecoin price?
At the time of writing, DOGE is trading around $0.40. Market dynamics suggest that the outcome of this consolidation phase will guide the rest of the cycle.
With a potential breakout towards $0.54 or a pullback to critical support around $0.33, Saturday will be a day to watch for Dogecoin investors.
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Source: https://newsbit.nl/dogecoin-op-scherp-grote-prijsbeweging-verwacht-voor-zaterdag/
