Dogecoin (DOGE) is experiencing a narrowing range, and chart observers believe this may signal a significant volatility, likely trending upwards. Currently, Dogecoin is in a triangular consolidation, predicting a potential 30% breakout, which has sparked debate among traders.
Historically, this type of pattern often signals significant volatility for DOGE.
Currently, DOGE is trading at around $0.226, with a 24-hour trading volume of approximately $2.1 billion and a market cap of $35 billion, firmly ranking in the top ten of cryptocurrency market capitalization.
Martinez is focusing on the symmetrical/converging triangle pattern: the convergence of highs and lows compresses volatility, and price typically has a decisive move after breaking the trendline. He estimates a 30% price increase based on the height of the triangle. Several indicators also show similar signals, with upward targets varying from 30% to 60% due to different breakout levels. Recently, there have been bullish crosses, improving momentum indicators, a 'golden cross' in moving averages, and on-chain and derivatives market sentiment is also bullish, which may amplify volatility during the breakout.
However, the direction of the triangle breakout is uncertain: if the key support level below cannot be maintained, it may result in a downward retracement of over 30%. Trading volume is crucial; low volume breakouts have low reliability.
In the short term, attention should be paid to the upper trend line (resistance) and the lower ascending support line of the triangle: a daily closing price breaking above the trend line with increased volume is a bullish signal; breaking below the lower trend line may shift momentum to bearish and could quickly test the lower support.
However, opinions on the breakout target are currently divided.
Conservatively looking at just above $0.30, while more aggressive traders believe it could reach above the mid-$0.30 range if the uptrend continues. DOGE is currently in a typical consolidation phase, and after a breakout, there may be rapid and significant volatility, with potential upward movement exceeding 30%. However, the direction depends on confirmation factors such as the daily closing price and trading volume. Traders need to pay attention to trend lines and trading volume and manage positions to respond to breakout or breakdown situations.
