Dogecoin Could Witness a 6,770% Rally If This Pattern Continues, Analyst Explains

A recent analysis has suggested that Dogecoin (DOGE) could potentially experience a massive rally of around 6,770% if a particular chart pattern continues to hold for the meme coin.

A Close Look at Dogecoin's Long-Term Chart

Analyst Ali Martinez highlighted a long-term chart pattern in a recent post on X, showing how the weekly price of Dogecoin has been trading within a specific formation. This pattern is known as an Ascending Parallel Channel in technical analysis.

In a Parallel Channel, the price of an asset consolidates between two parallel trendlines. The upper line is formed by connecting successive tops, and the lower line connects the bottoms.

As the asset moves within the channel, it tends to encounter resistance at the upper line and support at the lower line. A breakout from either of these levels typically indicates a continuation of the trend in that direction.

There are three main types of Parallel Channels: those parallel to the time axis, those sloping upwards, and those sloping downwards. The first type does not have a specific name, while the latter two are known as Ascending and Descending Parallel Channels, respectively.

Since Ascending and Descending Parallel Channels have sloped trendlines, they correspond to periods of consolidation in the asset's price movement occurring to the upside or downside.

According to Martinez, Dogecoin has been trading within an Ascending Parallel Channel for almost a decade, as evidenced by the chart.

A recent retest of the channel's lower boundary occurred earlier this year, providing a crucial point of support for DOGE. This retest is also significant in the context of the broader trend, as highlighted by the analyst.

Dogecoin's Current Trend: Stepping-Stone Decline Phase?

Martinez pointed out that DOGE's current price trajectory resembles the trend observed during the last two bull cycles.

In each of those bull runs, the cryptocurrency experienced an initial sharp upward burst, followed by a minor decline, which then led into the main bull rally.

Over the last few weeks, Dogecoin has been trending down, which could indicate that it is currently in that stepping-stone decline phase. Based on the past cycles, this minor decline could be setting up the meme coin for a rally to the upper boundary of the Ascending Channel.

Considering the distance to the channel's upper level, the analyst noted that it would take Dogecoin a rally of 6,770% to reach that point. It remains to be seen whether the Ascending Channel will continue to hold for DOGE and if history will repeat itself with anything similar to what occurred in the past cycles.

Dogecoin's price at the time of writing is around $0.32, with the cryptocurrency up over 2% in the last seven days.