An analyst explained that a monthly close of Dogecoin above this level could pave the way for the memecoin to retest the all-time high (ATH).
Dogecoin is trading around the lower end of an ascending channel.
In a recent post on X, analyst Ali Martinez shared a technical analysis (TA) pattern that Dogecoin's monthly price has recently exhibited. The pattern being referred to is the 'ascending channel', which is a type of parallel channel.
Parallel channels form when the price of an asset consolidates between two parallel trend lines. The upper line has the potential to provide resistance in the future, while the lower line supports. A break of either of these two levels may imply a continuation of the trend in that direction.
Parallel channels can have three types. The most basic type involves parallel trend lines with a time axis. This scenario occurs when consolidation takes place horizontally.
The other two types form when an asset consolidates at an angle. When this occurs in an upward direction, the formed channel is called an ascending channel. Similarly, downward consolidation leads to a descending channel. In the context of the current topic, the first of these two types is of interest.
Since the ascending channel indicates a net price accumulation phase in the upward direction, its upper line connects higher peaks and its lower line connects higher lows. Below is the chart shared by the analyst, showing that the ascending channel indicates that Dogecoin's price has been trapped inside for the past few years.
As can be seen in the chart above, Dogecoin's price over the last month has dipped below the lower end of this long-term ascending channel and seems to be sliding below it. If the memecoin currently witnesses a continuous downward move, then a downward breakthrough may be confirmed.
However, in the event that it can recover back above the lower level of the channel once again, its path may once again become the path outlined by the model. The lowest point of the ascending channel is not the only level that the asset is very close to breaking; there is also the 0.786 Fibonacci retracement level.
Fibonacci retracement levels are based on the ratios from the famous Fibonacci sequence. The Fibonacci retracement level of 0.786 from the chart is around the price level of $0.20. The next key level, the 1.000 retracement, corresponds to DOGE's ATH of approximately $0.74.
As Martinez explains,
If Dogecoin $DOGE can secure a monthly close above $0.20, it could pave the way for a price rally towards the all-time high of $0.74. Such a breakthrough would signal strong bullish momentum and possibly attract investor interest.