Dogecoin is consolidating at support as an inverse head-and-shoulders pattern emerges, with Bollinger Bands framing a potential bullish breakout or collapse.
Summary
- Dogecoin compresses between a nearby buy order block and a horizontal supply band on the daily chart
- An emerging inverse head-and-shoulders pattern targets an above-ground supply zone as price breaks and closes above neckline resistance.
- The Bollinger Bands show prices holding above the baseline, with a loss of the demand zone exposing the lower band and December lows.
Dogecoin (DOGE) is consolidating below a defined resistance level while holding support in a nearby demand zone, with technical analysts identifying a potential inverse head-and-shoulders pattern on the daily chart, according to market observer Cantonese Cat.
Dogecoin is forming a consolidating pattern
The pattern shows a left shoulder that formed in early December, a deeper “head” that extended into late December, and a developing right shoulder as the price fell from an early January peak, the analysis said. The daily chart has identified a ‘buy order block’ spanning a narrow mid-range, with current price action pulling back towards the top of that zone after failing to sustain recent gains.
According to the technical analysis, a horizontal resistance band acted as a power supply during recent tests. A break above this level would be needed to confirm the inverse head-and-shoulders pattern, the analyst said.
The measured movement for the pattern is equal to the distance from the neckline to the head low, projected upward from the neckline, with the target approaching a previously identified overhead supply zone, according to the map analysis.
Bollinger Bands on the two-day chart show price trading above the baseline, with the upper and lower bands enclosing a range related to the highlighted resistance and recent lows, Cantonese Cat noted. Sustained closes above the base and in the upper half of the bands could signal a shift in momentum after a prolonged decline, technical analysts say.
According to the analysis, the upper Bollinger Band is close to the same zone identified as resistance on the daily chart. If Dogecoin maintains support at the identified buying bloc and moves above the supply band, the inverse head-and-shoulders thesis would gain validity, the analyst said.
According to the technical assessment, a loss of the buy order block would weaken the pattern significantly and shift the focus to the lower Bollinger Band and late December lows.
