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As Bitcoin continues to attract major inflows from institutional investors, the Dogecoin price is on the move as it is increasingly becoming the go-to cryptocurrency for retail investors. Interestingly, Dogecoin’s price performance has also largely correlated with the Bitcoin price. As such, Bitcoin’s recent break above the $100,000 price level has seen the Dogecoin price also breaking above the top of an ascending triangle that has capped its price action since November 23.
Ascending Triangle Breakout: The Key To Dogecoin’s Next Move
According to a technical analysis of the Dogecoin price by crypto analyst Rekt Capital relayed on social media platform X, the Dogecoin price has just broken above the upper trendline of an ascending triangle pattern, which was highlighted on the 1D candlestick timeframe.
The ascending triangle pattern often indicates a continuation of a bullish trend. For Dogecoin, the breakout above this formation signals bullish strength, but it hinges on the asset holding this level as support. This is because the Dogecoin price has immediately started to retest the upper trendline of this ascending triangle pattern. If the retest is successful, it could act as a launchpad for a sustained rally in the coming weeks and months.
According to Rekt Capital’s projection, the surest price target in such a case is at $0.569.
Bitcoin’s Influence On Dogecoin Price Action
Historically, Dogecoin’s price trajectory has mirrored Bitcoin’s during periods of market optimism. According to IntoTheBlock, Dogecoin has a 0.96 price correlation with Bitcoin on a scale of 1 on the maximum end. To put this in comparison, Ethereum, the second-largest cryptocurrency, has a 0.75 price correlation with Bitcoin.
Bitcoin’s recent bullish breakout above $100,000 has reignited market confidence, encouraging inflows across major cryptocurrencies, including Dogecoin. Interestingly, the Bitcoin price breakout also sent Dogecoin on a little rally to $0.4582. Analysts suggest that as Bitcoin consolidates its gains and maintains its bullish trajectory, it provides a favorable environment for Dogecoin and other altcoins to rally further.
However, the correlation between the two assets means that Dogecoin’s potential breakout to $0.569 remains tied to Bitcoin’s ability to sustain its upward momentum. Should Bitcoin falter or face a sharp correction, Dogecoin could also struggle to maintain its bullish momentum.
At the time of writing, the Dogecoin price is trading at $0.4379, meaning the bulls are still trying to turn the resistance trendline of the triangle formation into support. However, there remains the risk of a break below the Dogecoin price, especially considering the fact that the Bitcoin price has broken below $100,000 again in the past few hours.
Featured image created with Dall.E, chart from Tradingview.com
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