Dogecoin Drops 20% in Week, Tests Key Support Level

Dogecoin, the popular memecoin, is currently at a critical juncture as it tests the lower bound of an ascending channel pattern. Analyst Ali Martinez has highlighted this pattern, which has been forming in the weekly price of Dogecoin for the past decade. This ascending channel is a type of parallel channel, where the price of the asset remains between two parallel trendlines. The upper trendline acts as resistance, while the lower one serves as support.

In an ascending channel, the trendlines slope upwards, indicating higher lows and higher highs. This pattern suggests that the price of Dogecoin has been consolidating to the net upside. However, a breakout above the channel would be bullish, while a drop below it could be bearish. The current price of Dogecoin is nearing the lower level of the channel at $0.16, a level that has previously provided support.

Martinez notes that if Dogecoin holds this level and bounces back, it could potentially rally to $2. This target is roughly where the asset would meet the middle line of the channel, a level that has also shown interactions with its price in the past. However, there is always a chance of a breakdown, which could lead to bearish price action.

At the time of writing, Dogecoin is trading around $0.176, down more than 20% over the last seven days. The price of the coin has been sliding down over the last few days, and all eyes are on whether it will find support at the $0.16 level and continue its upward trend within the ascending channel.