Dogecoin (DOGE) Could See an Extended Drawdown, This Ascending Triangle Pattern Might Be The Reason

An analyst has pointed out how Dogecoin could end up seeing an extended drawdown, based on this Ascending Triangle pattern forming in its hourly price.

Analyst Has Spotted An Ascending Triangle Pattern For Dogecoin

Dogecoin price has seen some support from a technical analysis angle.

Analyst Ali Martinez has pointed out how the memecoin could be seen forming an Ascending Triangle pattern in its hourly price.

This pattern is usually seen as bullish for an asset, but in this case, it would appear that Dogecoin has seen through the support of this triangle.

Is Dogecoin price poised for an extended drawdown, based on this technical analysis formation?

Ascending Triangle Pattern Spotted For Dogecoin

In a recent post on X, analyst Ali Martinez has talked about an Ascending Triangle pattern for Dogecoin.

The “Ascending Triangle” refers to a technical analysis (TA) formation that appears when the price of an asset consolidates inside a triangular region.

The ‘Ascending’ in the pattern’s name comes from the fact that this consolidation happens towards a net upside. There are two trendlines in this pattern: an upper level that’s parallel to the time-axis, tracing successive highs, and a lower one that has a positive slope, connecting successive higher lows.

Just like with any other consolidation pattern in TA, the upper level of the triangle is likely to be a source of resistance in the near future, while the lower one that of support. A break out of either of these boundaries can signal a continuation of trend in that direction.

The Ascending Triangle isn’t the only type of triangular pattern in TA, two other popular varieties include the Descending Triangle and Symmetrical Triangle. The former of these is just the opposite of the Ascending Triangle: it forms when the price consolidates to the downside instead.

The latter, the Symmetrical Triangle, is a sort of middle-ground between the Ascending and Descending versions, with both of its trendlines having an equal and opposite slope. That is, when the asset is inside this pattern, it converges at a mid-point.

Recently, Dogecoin’s 1-hour price looked like it was following an Ascending Triangle. Here is the chart shared by Martinez, that shows this pattern for the memecoin:

As is visible in the above graph, the hourly Dogecoin price recently made a retest of the lower line of this Ascending Triangle, but it would appear the coin has been unsuccessful in finding support at it, as it has slipped right through.

Also, from the graph, it’s apparent that the memecoin wasn’t far from the apex of the triangle when this break came. Consolidation gets narrower as an asset reaches the end of the pattern, so breakouts start to become more likely.

As mentioned before, a breakout can mean a potential continuation of trend in the direction of the break. So, in this case, DOGE has just witnessed a bearish signal. Often, the length of a move emerging out of an Ascending Triangle breakout is of the same length as the height of the triangle itself. Based on this, the analyst notes a 16% price swing could occur for the coin as a result of pattern.

Dogecoin Price Today

At the time of writing, Dogecoin is trading at $0.153 and has seen a 0.46% increase over the past hour.

The memecoin has taken to flat movement in the past week as its price is still floating around the $0.16 mark. A 16% price swing from these levels would take the coin to either $0.13 or $0.18.

The next level of resistance for the coin is at $0.16, while the next level of support is at $0.14. A breakout of either of these price ranges could spark the next leg of the trend.