Crypto analyst Kevin (@Kev_Capital_TA) has identified a bullish pennant pattern on the 4-hour Dogecoin/USD price chart, suggesting a significant price movement could occur this Saturday. In a post on X, Kevin commented: “Dogecoin is now forming a more clearly defined potential bullish pennant pattern, with multiple points of contact on each side with plenty of consolidation time. Something to keep an eye on everyone.”
Will Dogecoin Price Breakout?
The chart shared by Kevin illustrates a bullish flag pattern. A bullish flag typically signifies a pause in the prevailing uptrend, followed by the potential continuation of that trend. This pattern is characterized by converging trendlines that include a price consolidation phase after a strong rally.
In the case of Dogecoin, the flag is delineated by converging yellow trendlines, indicating diminishing volatility and a consolidation phase. The memecoin is trading around $0.38 within this flag structure. Kevin's analysis suggests that this significant breakout could occur "at the latest by Saturday."
In technical analysis terms, a breakout occurs when the price moves beyond the defined trendlines of a formation, signaling the potential for continuation or reversal of the trend. With the price rally prior to the formation of the flag, an upward breakout is often anticipated. However, Kevin remains cautious by acknowledging the unpredictability of the market: "Up or down," he notes.
The chart also highlights several horizontal lines indicating key support and resistance levels. The upper resistance level is identified around $0.54, which may be tested if a bullish breakout occurs. Conversely, immediate support levels lie around $0.33 and $0.2950, which will be crucial if the price drops.
Kevin also highlights the role of the Random Relative Strength Index (RSI) in the daily chart. He states: "Random RSI is an extraordinary momentum indicator in strong trends in either direction. The daily RSI is nearly reset for Dogecoin and may require another week plus or minus a few days to fully reset. Once it is reset, I expect the next leg to begin."
Random RSI is a technical momentum indicator that compares the RSI level to its high-low range over a certain period, providing insights into potential overbought or oversold conditions. The daily RSI reset shows that previous overbought conditions have eased, potentially paving the way for significant price volatility ahead.
Emphasizing the potential impact of the current consolidation phase, Kevin adds: "The longer Dogecoin consolidates, the larger the next leg will be. In my opinion, the next leg will be the largest of the DOGE rally and will give us a clear indication of where it will peak in the cycle."
