Dogecoin patterns that led to a 28,000% rally in 2020 have returned
Dogecoin is back on cryptocurrency investors’ radar after several important patterns emerged. This was pointed out by cryptanalyst Ali Martínez, who identified several patterns similar to those observed in 2020 that could result in a parabolic rally.
Dogecoin chart is similar to 2020
2020 was a pivotal year for Dogecoin as it was the setup that led to one of the most impressive rallies in cryptocurrency history. It also shares a similarity with 2024, as it was also a year in which the Bitcoin halving took place, leading to an incredibly bullish year for the space.
It appears that Dogecoin hopes to repeat this rally as similar patterns begin to form again. According to crypto analyst Ali Martínez, the current performance of the meme coin bears a striking similarity to what happened in 2020. More specifically, the formation of a bullish descending triangle.
The previous descending triangle formed in the years leading up to 2020 before ending in early 2020. From here, we can see from the chart that DOGE price rose but experienced a series of notable dips and recoveries before rallying.
If Martinez’s analysis is correct, then DOGE is on the verge of another parabolic rally. Now, while it may not end up being a 28,000% recovery as seen before, it would be no less significant. In this case, the crypto analyst puts the target for Dogecoin at $10 if history repeats itself.
DOGE inflation could be a threat
Although Dogecoin is a proof-of-work (PoW) blockchain, just like Bitcoin, it differs from the latter in that there is no limit to its supply. This has meant that the supply of DOGE has grown enormously over the last three years, which could hurt its chances of recovery.
For example, when Dogecoin reached $0.7 in 2021, it had a market capitalization of around $80 billion. However, if Dogecoin reached its all-time high of $0.7 with its current supply, the market capitalization would be over $100 billion, meaning its supply has grown by around 25% since 2021.
However, expectations for Dogecoin remain high as it continues to enjoy support from the likes of Elon Musk. With its strong community, DOGE is poised to see another strong performance in the bull market.