Dogecoin is consolidating beneath a defined resistance level while maintaining support at a nearby demand zone. Technical analysts are identifying a potential inverse head-and-shoulders pattern on the daily chart, according to market observer Cantonese Cat.
Dogecoin Forms Consolidating Pattern
The pattern shows a left shoulder formed in early December, a deeper “head” extending into late December, and a developing right shoulder as price declined following an early-January spike, according to the analysis. A “buy order block” spanning a narrow mid-range has been identified on the daily chart, with current price action pulling back toward the top of that zone after failing to sustain recent gains.
A horizontal resistance band has acted as supply during recent tests, according to the technical analysis. A break above this level would be required for the inverse head-and-shoulders pattern to confirm, the analyst stated.
The measured move for the pattern equals the distance from the neckline to the head low, projected upward from the neckline. The target approaches a previously identified overhead supply zone, according to the chart analysis.
Bollinger Bands on the two-day chart show price trading above the basis line, with upper and lower bands enclosing a range tied to the highlighted resistance and recent lows, Cantonese Cat noted. Sustained closes above the basis and into the upper half of the bands can signal a shift in momentum after an extended decline, technical analysts say.
The upper Bollinger Band sits close to the same zone identified as resistance on the daily chart, according to the analysis. If Dogecoin maintains support at the identified buy-side block and moves above the supply band, the inverse head-and-shoulders thesis would gain validity, the analyst stated.
A loss of the buy order block would weaken the pattern materially and shift focus toward the lower Bollinger Band and late-December lows, according to the technical assessment.