Dogecoin is currently eyeing a 23,200% rally as it repeats a previous descending triangle pattern amid a massive whale accumulation involving 3 billion DOGE.
Despite the occasional market-wide rallies, Dogecoin (DOGE) has failed to reclaim and hold above the $0.1 price. Amid this bearish reality, a prominent analyst has identified a pattern that resulted in a 23,200% rally for DOGE in 2021.
Crypto market watcher Ali Martinez called the public’s attention to a descending triangle formed on the Dogecoin weekly chart. The analyst had mistakenly noted that this pattern was observed monthly.
#Dogecoin | The last time a descending triangle developed on the monthly chart $DOGE pumped 23,200%! ?
I'll be looking at a sustained monthly close above $0.80 for confirmation. pic.twitter.com/RVgymwIhtK
— Ali (@ali_charts) July 23, 2023
However, the fascinating part of the analyst’s disclosure is that the last DOGE faced this multi-year descending triangle, it rallied by an astronomical 23,200%. The recent revelation has raised questions about the asset’s ability to engineer a similar rally.
DOGE Faced Multi-Year Downtrend
Notably, DOGE leveraged a massive run five years ago to claim a high of $0.0187 in January 2018. This represented the asset’s all-time high at the time. However, an exhaustion of the run pushed DOGE into a bearish storm, as the asset registered persistent declines for over two years.
Amid these declines, DOGE formed a multi-year descending triangle on the weekly chart, as pointed out by Ali. A descending triangle is a pattern formed by lower highs connected by a diagonal line. The pattern suggests a potential continuation of a downtrend.
Dogecoin’s downtrend persisted until early 2021 when the asset showed signs of a breakout. Upon breaking out of the downtrend, DOGE rallied to its latest all-time high of $0.7376 in May 2021. Per data from Ali’s charts, this represented an impressive 23,200% increase from the cycle low.
An Eerie Repetition
However, following the ATH, DOGE faced another round of declines, leading to its latest price. Dogecoin is now over 89% down from the all-time high. These persistent declines have resulted in the formation of another descending triangle.
Ali’s disclosure raises questions about Dogecoin’s potential to register a rally similar to the 2021 run once it breaks out. However, the analyst emphasized that a persistent weekly close above $0.08 could confirm a breakout.
Whales Amass 3 Billion DOGE
Notably, this disclosure coincides with an encouraging accumulation observed among Dogecoin whales. In a subsequent tweet, Ali highlighted that whales holding 1 billion to 10 billion DOGE accumulated 3 billion tokens worth $225 million over the past three weeks.
#Dogecoin whales bought around 3 billion $DOGE over the last three weeks, worth $225 million! pic.twitter.com/y4VC6nT9EK
— Ali (@ali_charts) July 24, 2023
This accumulation pattern further compounds hopes of a potential breakout from the descending triangle. However, the extent of a DOGE rally following the breakout remains to be seen. Some investors cite DOGE’s increased circulating supply as a deterrent to such a rally.
Impressively, Dogecoin has rallied by over 31% in the last seven weeks, registering six weekly gains out of seven closes. Despite this bullish momentum, DOGE continues to trade below the 50-day EMA ($0.0823) and 200-day EMA ($0.8684). The asset is changing hands at $0.0773.