Cryptocurrency analyst @ali_charts on X has drawn attention with technical analysis indicating that Dogecoin ($DOGE) is forming a descending wedge pattern.

Shared on July 31, the chart emphasizes a potential bullish reversal, predicting a price target of $0.265 - a significant increase of 18.6% from the closing price of $0.223329 on the same day, according to CoinMarketCap.

The descending wedge pattern, characterized by converging trendlines from mid-July lows to late July highs, is often seen as a precursor to an upward breakout, especially under conditions of low trading volume. However, the cryptocurrency community remains divided on its implications.

The upward price trend depends on technical precedents. A 2025 study from the Financial Markets Journal shows that descending wedge patterns have a 65% success rate in bullish breakout phases when trading volume decreases during consolidation.

The chart from @ali_charts also aligns with this, showing a narrowing price range, signaling accumulation by buyers. Optimistic users on X, like @Spahija_23, believe a breakout could push DOGE to $0.43, while others, such as @Solarweb33, praise the 'classic wedge pattern.'

However, skepticism remains. @Shan_Specter argues that the lower highs of this pattern dampen optimism, and @joelovestrading warns about Dogecoin's inflation mechanism - 5 billion new coins added annually since 2014, according to Wikipedia - which could potentially limit price increases. Inflation presents a significant counterargument.

Unlike Bitcoin's fixed supply, Dogecoin's increasing circulation (with inflation decreasing from 5% in 2015 to 2% by 2035) could devalue it, especially if demand does not exceed supply. The Journal notes that the success rate of such patterns drops to 40% with high-inflation assets, encouraging traders to consider broader market sentiment and support levels around $0.10-$0.15, as noted in web analyses like Mitrade.com. With current price action near the top of the wedge pattern, a decisive breakout above resistance is crucial.

Currently, Dogecoin enthusiasts are closely monitoring. The descending wedge pattern brings hope, but inflation and market volatility could undermine the $0.265 target. Traders are advised to combine technical analysis with fundamental analysis before acting.