Dogecoin seems to be on the verge of a price increase: Analyst sets new price target

Crypto analyst Balo (@btcbalo) has highlighted a major technical breakthrough on the Dogecoin (DOGE/USD) chart, indicating a bullish trend in the near future. Balo's analysis, based on the 4-hour chart, points out several important technical developments that are driving expectations of continuous price increases for Dogecoin. Why Does Dogecoin Seem to Be Going Up One platform in Balo's assessment focuses on the decisive break of Dogecoin from the long-term downtrend on December 28th. This downtrend, initially established from the $0.48 peak on December 8th, has served as a strong resistance level, effectively influencing DOGE price fluctuations throughout December. The breakthrough on this trend marks a significant turning point. After this price increase, Dogecoin has experienced a small pullback in which the memecoin quickly retested the broken trend line. However, the retest was successful, strengthening the price prospects for Dogecoin.

In addition to breaking out of the downtrend, the breakdown of the descending triangle pattern formed since December 21 is significant. A descending triangle is characterized by a series of lower highs converging with a relatively flat support level, often signaling the potential for further price declines. However, the ability of Dogecoin to break out of this pattern today, on January 2, indicates a change in market sentiment. The appearance of the descending triangle, along with the breakout, reinforces the bullish narrative, although retesting the upper boundary of the triangle may provide further confirmation for this upward trend. An integral part of Balo's thesis of a major breakout is also the volume profile, which provides an in-depth understanding of trading activity at various price points. Dogecoin has recovered from significant support at the highest volume cluster around $0.32, indicating a strong basis of cumulative trading interest. On the upside, trading volume thins out to the $0.40 area, where a cluster rises to $0.43. This cluster implies that at this level, DOGE may encounter minimal resistance, paving the way for Dogecoin to aim for the year's high of $0.4834, recorded on December 8th. Continuing to strengthen the prospect of price increase is the completion of the ABC pattern on the Dogecoin chart. The ABC pattern is a corrective sequence in technical analysis that often signifies the end of a retracement phase and the continuation of the previous trend. In the case of Dogecoin, the completion of this pattern aligns seamlessly with other bullish indicators obtained from breakout analysis and volume profile. Therefore, Balo's comment "DOGE [is] starting to break out, I see no reason to stop now. Will soon reach a new peak," may signal that DOGE is heading towards a new peak. At the time of reporting, DOGE was trading at $0.34.