Crypto analyst Balo (@btcbalo) has highlighted a major technical break on the Dogecoin (DOGE/USD) chart that suggests a bullish trend in the near future. Balo’s analysis, based on the 4-hour chart, highlights several key technical developments that are fueling expectations for Dogecoin’s price to continue to rise.

Why Dogecoin Looks Poised to Rise

The basis for Balo’s assessment is Dogecoin decisively breaking its long-term downtrend line on December 28. This downtrend line, originally established from the December 8 high at $0.48, served as a formidable resistance level, effectively dictating DOGE price movements throughout December.

A break above this trend line marks a critical turning point. Following this rally, Dogecoin experienced a minor pullback, during which Memecoin quickly retested the broken trendline. However, the retest was successful, strengthening the bullish outlook for Dogecoin.

The breakout from the downtrend line is complemented by the dissolution of the descending triangle pattern that has been forming since December 21. A descending triangle is characterized by a series of lower highs coinciding with a relatively flat support level, often signaling a potential bearish continuation.

However, Dogecoin’s ability to break out of this formation today, January 2, suggests a change in market sentiment. A breakout of the descending triangle combined with a breakout strengthens the bullish narrative, although a retest of the upper boundary of the triangle could provide further confirmation of this uptrend.

Also integral to Balo’s major breakout thesis is the volume profile, which provides a detailed understanding of trading activity at various price levels. Dogecoin rebounded from significant support in the highest volume cluster around $0.32, indicating a robust base of cumulative trading interest.

On the positive side, volume is lithe until the $0.40 region, where there is a huge group up to $0.43. This focus means that above this zone, DOGE may face minimal resistance, paving the way for Dogecoin to hit the yearly high of $0.4834 recorded on December 8.

Further strengthening the bullish outlook is the ABC formation on Dogecoin’s chart. The ABC pattern is a corrective sequence in technical analysis that usually indicates the end of the retracement phase and the continuation of the previous trend. In the case of Dogecoin, the finalization of this pattern smoothly coincides with other bullish indicators obtained from the analysis of the breakout profile and volume.

Hence Balo’s remark “DOGE [is] It’s starting to explode, I see no reason to stop now. Modern highs soon” could signal that DOGE is heading towards a modern high.

At press time, DOGE was trading at $0.34.

Featured image created with DALL.E, chart from TradingView.com