Dogecoin (DOGE) quickly lost volatility after the recent crypto market collapse, which has now declined to levels of the period from October 2022 to May 2023.

The upcoming movement could result in both Dogecoin rising by 170% and falling by another 34%. The hidden bullish divergence potentially increases the chances of the first scenario. However, this requires the DOGE price to make a successful bullish breakout from the long-term descending triangle.

Dogecoin in a long-term descending triangle

The Dogecoin project token – one of the most recognizable “calling cards” of the crypto market – has many fans. It appeared in 2013 as a meme coin, but many already believe that DOGE has outgrown this status.

As the results of technical analysis of the weekly chart show, the picture on DOGE looks ambiguous, giving signals about the period of long-term accumulation. Since January 2022, i.e. 84 weeks already, the price has been moving in a relatively narrow trading channel between the low at $0.055 and the peak at $0.160.

Additionally, Dogecoin is in a descending triangle pattern (blue lines), outside of which price has not closed since April 2022, or 16 months. Despite several price bullish deviations (blue areas), this formation remains in place.

Meanwhile, trading volumes have been steadily declining since October 2022 (orange line).

A descending triangle is most often a bearish downtrend continuation pattern. It often ends with a long-term decline, especially on long timeframes. If this is the case here, a bullish breakout from this formation, which should occur in the next few weeks, could be a confirmation of a bullish trend reversal.

The weekly relative strength index (RSI) is also giving mixed signals. This momentum indicator is currently at 41 and declining. This indicates a continuation of the bearish trend.

However, a bullish signal is that despite the decline, the weekly RSI is holding above the rising support line (blue color), which has been present on the chart since January 2022. If the indicator does not break below 40, an upward bounce is possible in the coming weeks.

By Linda

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