Analyst Ali Martinez suggested that Dogecoin (DOGE) may be preparing for a significant upward movement, based on the fact that this meme coin has historically broken out of similar formations in a bullish fashion after moving within a descending wedge pattern on the weekly chart for a year.
What happened: 1-year pattern, key inflection point approach
Martinez posted his analysis on X, stating that he identified a descending wedge structure that has been containing Dogecoin's price action since the beginning of 2024. The token's price recently retraced to the lower trendline of this pattern and has tested a support zone that had previously formed just before breaking upward.
The descending wedge forms when the price moves between two downward-sloping convergence trend lines.
Technical analysts generally interpret such patterns as signals of either the continuation of a bullish trend or a trend reversal.
Martinez highlighted previous descending wedges that appeared multiple times in the Dogecoin chart history, each of which ended with an upward breakout.
The currently forming pattern is the largest descending wedge the token has encountered so far.
Also read: XRP Pattern Hints To Potential $4 Price Target, Analyst Claims
Why it matters: Historical precedents suggest the potential for an increase
"Dogecoin (DOGE) tends to maintain wedge structures well, and the breakout in this pattern could be quite strong," Martinez stated.
Given that Dogecoin has shown significant movement in similar chart patterns in the past, this analysis carries weight. The maintenance of the current support level remains the most important variable for traders watching this meme coin.
According to traditional technical analysis interpretation, confirmation of a breakout signifies a signal suggesting sustained upward momentum.
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