The Dogecoin price, which has been on a consolidation trend since November 12, has given rise to a rare, bullish chart pattern known as the high and tight flag. This pattern, which resembles the bull flag, prepares the Dogecoin price for a significant upward movement.
Analyst Highlights Bullish, Very Tight Flag Pattern for Dogecoin
Trader Tardigrade, known for his in-depth technical analyzespointed out that Dogecoin price is currently forming a very tight flag pattern on the daily candlestick period, which is a rarity in technical charts that often precede explosive price movements. According to his post on social media platform
In his words: “#Dogecoin forms a very tight flag pattern 🔥 The “Very Tight Flag Pattern” stands out as a rare, BUT extremely bullish signal that indicates a very possible and significant upward price movement.
First of all, the emergence of this very tight flag pattern means that the $1 level is inevitable for Dogecoin price. The analyst further speculates that the combination of strong price momentum, growing market enthusiasm, and FOMO (fear of missing out) among retail investors will ultimately push Dogecoin price to targets of 5 $ to $10.
Understanding the Very Tight Flag Pattern
The high and tight flag is a special bullish case of the bull flag pattern. Both designs are characterized by a flagpole and flag/handle. Unlike the bull flag, the formation of a high and tight flag follows strict criteria, which makes it somewhat interesting. This criterion is characterized by a strong price increase of at least 100% over a short period of maximum eight weeks. This rapid rise constitutes the “mast” of the price structure. In the case of Dogecoin price, the mast was formed over nine days from November 3 to November 12, where it saw a gain of around 180%.
Following this rise, the price enters a consolidation phase, moving sideways or slightly downward, creating the “flag/handle”. This consolidation generally retraces no more than 10% of the initial rise and lasts at least five days and at most three weeks.
In the case of Dogecoin, the flag has been in play for ten dayswith a grip depth of 10%. The trend is considered complete when the price breaks above the consolidation range, often leading to further gains.
At the time of writing, Dogecoin is trading at $0.3926, with a gain of 1.88% in the last 24 hours. A run to the first price target at $1 would result in a 155% gain. The other price targets at $5 and $10 represent returns of 1,170% and 2,440% from the current price, respectively.
Featured image created with Dall.E, chart from Tradingview.com