Dogecoin (DOGE)’s recent surge has caught the attention of analysts and traders, with its price action placing it among the top-performing assets on the market. Now, experts believe that the meme coin could be preparing for an even bigger rally, potentially targeting $0.90. A key technical indicator supporting this prediction is the formation of a second bullish flag on the 2-hour price chart.
Understanding the Bull Pennant Pattern
Bull pennants are classic continuation patterns in technical analysis. They appear after a significant price increase (flagpole), followed by a consolidation period (flag), and often lead to another breakout in the same direction as the previous trend. These patterns are particularly popular with traders because of their reliability in predicting price movements.
The first Bull Pennant
Dogecoin’s first bull flag formed between November 5 and 7, following a strong rally. Starting at $0.1677, DOGE surged to $0.2187, fueled by optimism surrounding geopolitical developments, including the US election results. This initial rally created the flagpole of the flag.
After reaching $0.2187, DOGE faced a pullback to $0.1857 as traders booked profits. However, the subsequent consolidation phase created the flag portion of the pattern, which is characterized by a narrowing price range. When Dogecoin suddenly broke above the flag resistance on November 7, it triggered a strong rally. Over the next five days, DOGE surged an impressive 139%, peaking at $0.4389 on November 12.
The Second Bull Pennant
Back to the present: Dogecoin appears to be forming a second bullish pennant after rising to $0.4389. This time, the flagpole extends the price increase from $0.30 to $0.4389. Currently, the asset is consolidating within a tightening range, signaling the completion of the flag portion of the pattern.
Trader Tardigrade, a seasoned market analyst, has highlighted that the similarities between the current setup and the first pennant are striking. If history repeats itself, a breakout from the second pennant could push DOGE to new local highs, with the next target at $0.90. Such a move would represent another 139% gain from the recent low of $0.3752.
Factors supporting bullish outlook
Several factors support the possibility of a price increase to $0.90:
Whale Accumulation: According to recent data, DOGE whales have been actively accumulating tokens. Just yesterday, 160 million DOGE tokens were purchased within 24 hours, reflecting renewed interest and confidence in the asset’s future prospects.
Technical Momentum: The bullish pennant pattern is widely considered a reliable indicator and Dogecoin's adherence to this structure strengthens the case for a further breakout.
Market Sentiment: The cryptocurrency market in general has seen an increase in activity and optimism, often spilling over to popular assets like DOGE.
Current price action
At the time of writing, Dogecoin is trading at $0.3752, still in the consolidation phase of the second pennant. All eyes are now on a potential breakout, which could set the stage for DOGE to challenge the $0.90 mark.
Conclude
Dogecoin’s technical setup and strong market fundamentals suggest it could be on the verge of another explosive rally. While patterns like the bull pennant are promising, traders should also keep an eye on external market factors and volatility. Whether DOGE reaches $0.90 remains to be seen, but optimism around the meme coin continues to grow.
