Cryptocurrency analyst Balo (@btcbalo) has highlighted a significant technical breakout on the Dogecoin (DOGE/USD) chart indicating a bullish trend in the near future. Balo's analysis, based on the 4-hour chart, points to several important technical developments driving expectations for a continued bullish move in Dogecoin's price.

Why Dogecoin Appears to Be Set for a Price Increase

A foundation in Balo's assessment focuses on the decisive breakout of Dogecoin from the long-term downtrend line on December 28. This downtrend line, initially established from the peak of $0.48 on December 8, acted as a strong resistance level, effectively dominating DOGE's price movements throughout December.

The breakout on this trendline marks an important turning point. Following this bullish move, Dogecoin experienced a minor pullback during which the memecoin quickly retested the broken trendline. However, the retest was successful, reinforcing the bullish outlook for Dogecoin.

Supplementing the breakout from the downtrend line is the breakdown of the descending triangle pattern that has formed since December 21. A descending triangle is characterized by a series of lower peaks converging with a relatively flat support level, often signaling the potential for further price declines.

However, the likelihood of Dogecoin breaking out of this pattern today, January 2, indicates a shift in market sentiment. The emergence from the descending triangle, along with the breakout, enhances the bullish narrative, although retesting the upper boundary of the triangle may provide additional confirmation for this upward trend.

An integral part of Balo's argument for a major breakout is also the volume profile, providing insights into trading activity at various price levels. Dogecoin has recovered from a significant support level at the highest volume cluster around $0.32, indicating a strong base of accumulated trading interest.

On the upside, trading volume remains thin until the $0.40 region, where there is a large cluster up to $0.43. This cluster implies that above this region, DOGE may encounter minimal resistance, paving the way for Dogecoin to reach the yearly high of $0.4834, recorded on December 8.

Continuing to strengthen the bullish outlook 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 pullback phase and the continuation of the prior trend. In the case of Dogecoin, the completion of this pattern aligns seamlessly with other bullish indicators obtained from breakout analysis and volume profile.

Thus, Balo's remark, "DOGE [is] starting to break out, I see no reason to stop at this time. It will soon reach a new peak," may signal that DOGE is heading towards a new high. At the time of press reporting, DOGE was trading at $0.34.