Dogecoin (DOGE) continues to trade sideways, with the meme cryptocurrency failing to establish its price above the $0.25 support.
However, a cryptocurrency analyst has shared a possible technical play showcasing DOGE’s potential parabolic rally, which could be characterized by a 1,500% spike.
According to Ali Martinez, Dogecoin could surge to $4 if the asset continues to follow its long-term price pattern, in which it has been trading inside an ascending channel since 2014, he said in an X post on February 21.
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While trading in this channel, Martinez noted that Dogecoin has repeatedly bounced between support and resistance trend lines.
Recently, the price rebounded from the lower support line, and if DOGE holds above $0.19, it could rally toward the resistance near $4, reflecting over 1,500% price growth.
It’s worth noting that an asset moves between two rising trend lines in an ascending channel, with support attracting buyers and resistance triggering selling. Now, if DOGE holds above support at $0.19, a rally is likely, but a breakdown could invalidate the trend.
Indeed, if Dogecoin manages to clinch the $4 valuation, the asset could hit a market cap of about $603 billion and potentially rank as the second-largest cryptocurrency, provided Ethereum (ETH) records minimal growth over the period.
DOGE’s path to $3
In another X post on February 22, Martinez shared key Dogecoin price levels to watch in the short term. Based on the coin’s long-term ascending channel, the prominent trading expert reinforced that Dogecoin’s most critical support zone lies between $0.19 and $0.16. This zone could anchor the cryptocurrency’s rally toward $3 if it holds.
Notably, the support zones align with the Fibonacci retracement levels at 0.382, and DOGE has historically bounced from this area. The 1.618 Fibonacci extension aligns with the $3 target.
Overall, Dogecoin has traded in tandem with the general cryptocurrency market, with major assets such as Bitcoin (BTC) failing to make a substantial breakout. However, regulatory developments could potentially trigger price growth for Dogecoin.
In this line, anticipation is growing for a potential Dogecoin spot exchange-traded fund (ETF) after the Securities Exchnage Commission (SEC) acknowledged Grayscale’s 19b-4 application.
While this is not an approval, it remains a possible bullish catalyst. NYSE Arca’s filing to list the ETF further boosts interest, and if approved, it could drive strong investor demand, pushing DOGE’s price higher.
DOGE price analysis
By press time, Dogecoin was trading at $0.24, down over 6% in the past 24 hours, while on the weekly chart, the memecoin is down about 4.5%.
Although the long-term outlook for Dogecoin remains bullish, the token’s short-term sentiments are bearish, considering its current price is below the 50-day simple moving average (SMA) of $0.3219 but slightly above its 200-day SMA ($0.2395).
On the other hand, DOGE’s relative strength index (RSI) stands at 37.03, indicating near-oversold conditions, hinting at a possible reversal if buying pressure increases. The key levels to watch for the near term are $0.2395 as support and $0.3219 as resistance.
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