Bitcoin (BTC) remains susceptible to further downside, having lost over 7% since hitting record highs above $124,000 on Thursday.

Bullish momentum fading

The weekly chart (candlestick format) shows that BTC’s ongoing decline follows repeated bull failure to secure a foothold above $122,056, the Fibonacci golden ratio. It also marked the inability to keep gains above the significant long-term resistance trendline that connects the bull market highs of 2017 and 2021.

Additionally, the weekly stochastic oscillator has rolled over from the overbought zone above 80, signaling a potential correction ahead.

Daily chart

On the daily chart, BTC’s latest candle has broken below the bullish trendline extending from April lows, following Friday’s bearish outside-day candle that signaled a potential shift toward seller dominance.

Together, these technical signals indicate an increasing downside risk for BTC in the near term, with a potential retest of $11,982, the point from which the market turned higher on Aug. 3. A violation of this level would shift focus tothe 200-day simple moving average at around $100,000.

A potential reversal higher to above $118,600 (Sunday’s high) during the day ahead would weaken the bear case.

• Resistance: $120,000, $122,056, $124,429.
• Support: $111,982, $105,295 (the 31.8% Fib retracement of April-August rally), $100,000.

After rising rapidly over the weekend to hit new all-time highs, the Bitcoin price seems to have hit a brick wall above $120,000, sparking a correction. While this is expected to be a short correction, a notable development involving an 8-year trendline that has marked the top of previous cycles has emerged. If this trendline resistance holds and Bitcoin fails to break it, then it could mean that the top is in, and what usually follows is a drawn-out bear market.

8-Year Trendline Suggests Bitcoin Top Is In

Crypto analyst MartyBoots, in an analysis on TradingView, caught a test of a an 8-year trendline which began back in the 2017-2018 cycle, marking the top of multiple bull markets. This trendline continued into the next major bull market and in the 2020-2021 bull market, the trendline once again marked the cycle top, with Bitcoin peaking at $69,000.

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Presently, the Bitcoin price has once again come in contact with this trendline, and the rejection from here does suggest that this trendline could be the real deal. After hitting above $123,000, Bitcoin was promptly pushed back downward from this level as sell-offs and profit-taking became the order of the day.

For this trend to be complete, though, there are a number of things that would need to happen first. For example, the analyst explains that investors should watch for the weakly RSI divergence turning bullish. Additionally, a decline in volume and more rejection wicks for Bitcoin would be confirmation that the price has topped. Marty also explained that the price touching this trendline for a third time increases the odds of it actually playing out the same way it has in the past.

If this trendline does mark the top once again, then it could signal the start of another bear market. As the analyst explains, a top marked by this trendline has in the past “triggered multi-month correction and Bear Markets.”

Still A Chance For Bullish Continuation

The test of this trendline does not necessarily mean that the Bitcoin price has to top at this level, because there is still a chance of bullish continuation. As the analyst explains, a decisive break above the trendline would turn this level into support and trigger further upside.

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In addition to this, there is also a lot of buying pressure on the Bitcoin price despite the profit-taking. More importantly is the fact that very large orders await at the $114,000 level. This shows a lot of demand for BTC, something that could drive the price upward as the cost basis for investors remains on the rise.

Nevertheless, the analyst advises caution at this level until there is a confirmation either way. “Risk-management alert: consider tightening stops, reducing leverage, or hedging until trendline fate is resolved,” Marty said in closing.

Featured image from Dall.E, chart from TradingView.com

The firm hold above the trendline suggests that market sentiment remains positive, with bulls maintaining momentum even during minor pullbacks. UniChartz emphasized that as long as PEPE continues to honor this rising support, the potential for further upside rises. A solid foundation like this often acts as a springboard for the next major rally.

Key Support Holds Strong: Why This Trendline Matters

According to UniChartz, PEPE’s price recently staged another strong rebound off its rising trendline, once again confirming it as a critical area of support. This bounce occurred just above a major horizontal support zone, reinforcing the idea that buyers are stepping in aggressively at key levels to defend the uptrend.

Adding to the bullish setup, UniChartz noted that the MACD indicator is beginning to turn positive, signaling growing bullish momentum. The strengthening MACD crossover typically precedes larger upward moves, hinting that PEPE could be gearing up for another leg-up.

At the moment, PEPE is closing in on a crucial test of the 100 EMA resistance. A clean and decisive breakout above the 100 EMA could serve as a major catalyst to the next key resistance area overhead. If momentum continues to build, PEPE might soon find itself charging into higher territory.

Where PEPE Could Rally Next

PEPE’s current price action is setting the stage for a potential rally as it continues to respect key support levels, particularly its rising trendline. The immediate focus is on overcoming the 100 EMA, which has proven to be a major resistance in previous attempts. A successful breakout above this level could trigger a sharp upward move, pushing PEPE toward the $0.00001152 zone, a critical price point that has historically held as a major hurdle.

If the bulls maintain their momentum and clear this initial resistance, the next key targets are the $0.00001313 and $0.00001731 levels. These zones, derived from past price action and Fibonacci retracements, represent significant obstacles that PEPE must overcome.

Given the strengthening bullish indicators, such as the MACD and ongoing support from the rising trendline, PEPE appears well-positioned for a breakout. Surpassing these resistance levels would mark a significant shift, paving the way for more gains in the near term and confirming the continuation of the bullish trend.

Dogecoin (DOGE) closed last week on a bullish note after testing critical technical levels that could define its next directional move. The weekly chart on Binance (DOGE/USDT) reveals that DOGE is currently trading just above the significant 0.786 Fibonacci retracement level at $0.167. This retracement is drawn from the all-time low at $0.0805 to the peak of $0.4844.

Dogecoin Reversal Confirmed?

A notable technical development is the interaction with a long-standing descending trendline, extending from the May 2021 all-time high. DOGE recently retested this trendline as support after breaking above it in November 2024.

Last week’s candle printed a Hammer-like formation, characterized by a small real body near the top of the range and a significantly longer lower shadow. While the candle also displays a modest upper wick, the dominance of the lower shadow signals that buyers absorbed aggressive sell pressure below the trendline and pushed the price back above the 0.786 Fibonacci level – a strong bullish signal.

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However, this week could be as important as last week. A weekly close above $0.167 seems essential to confirm the momentum. Otherwise, another test of the multi-year trendline could become a make-or-break moment for the Dogecoin price.

Notably, momentum indicators remain neutral to bearish. The weekly Relative Strength Index (RSI) closed around 39, reflecting subdued buying strength and highlighting that DOGE is still operating below the neutral 50 mark.

The Exponential Moving Averages (EMAs) are providing layered resistance above the current price.
The 100-week EMA lies at $0.17284, positioned just above DOGE’s current range, while the 50-week EMA is located at $0.21427. The 20-week EMA, the more immediate resistance during previous rallies, now sits at $0.24805. Support is reinforced at the 200-week EMA around $0.13621, a level that would likely serve as a last line of defense should DOGE crash below the multi-year trendline.

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Price action in recent weeks also shows DOGE breaking down from a bearish flag or channel formation, with the breakdown accelerating toward the confluence of the 0.786 Fibonacci level and the descending trendline retest. Despite this, the market responded with strong buying interest in the highlighted red support zone.

On-chain data further contextualizes the recent price action. Analytics firm Santiment reported via X today that Dogecoin, like most meme coins, has been heavily impacted during the ongoing two-month market-wide retracement. However, Santiment pointed out a bullish divergence on the network side.

The firm states: “Dogecoin, like most meme coins, have been hammered during the 2-month crypto-wide retrace. However, we recommend keeping an eye on the rising level of wallets holding at least 1M $DOGE, which has recovered during the price dump. Active addresses are also at 4-month highs.”

Adding to this sentiment, crypto analyst Daan Crypto Trades commented via X: “DOGE similar to PEPE but has already retaken the Election level after sweeping it. I think these are key levels to keep watching on a lot of these alts. A sweep & retake signals some short term relief and these levels can offer a clean invalidation level afterwards.”

This aligns with the technical observation that DOGE’s recent price action may represent a sweep of liquidity below a key level, followed by a recovery above support — a typical short-term bullish reversal pattern in crypto markets.

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

Recent price decline action has seen Dogecoin rebounding at a recent multi-month low after the entire market started last week on a liquidation stretch. However, technical analysis from analyst Trader Tardigrade suggests that Dogecoin may have already established its cycle bottom before the next price surge.

Dogecoin Tests Key Weekly Support After 40% Drop

The cryptocurrency market faced a significant downturn last week, with widespread losses hitting various digital assets. Dogecoin was no exception to the sell-off, experiencing a sharp decline of nearly 40% before finding support around $0.22. This drop marked the lowest price Dogecoin has reached since the beginning of 2025, and the last time it traded at this level was in early November 2024. 

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Despite the severity of the drop, technical analysis from crypto analyst Trader Tardigrade suggests that Dogecoin’s recent 2025 low may be more significant than it appears at first glance. In a social media post on platform X, the analyst shared a weekly timeframe chart highlighting that $0.22 is part of a key trendline that played a crucial role in Dogecoin’s price movements throughout 2024.

Now, with the price falling back to this level and bouncing off it, Trader Tardigrade noted that the trendline has seemingly flipped into a strong support zone.

As of now, Dogecoin has rebounded to $0.2561, reflecting a positive reaction of approximately 16% from its recent low. Notably, on-chain data from IntoTheBlock shows buyers stepped in just around this support level. However, Dogecoin’s ability to hold above this support level in the coming weeks will determine if the cryptocurrency has truly reached a bottom for the rest of this cycle. 

Image From X: Trader Tardigrade

Historical Pullbacks Point To $2 Price Target

In another analysis, Trader Tardigrade highlighted a recurring pattern in which the Dogecoin price tends to experience significant pullbacks of more than 50% after a strong multi-month rally. However, these pullbacks have always been accompanied by another strong rebound rally, and Dogecoin eventually reached a new peak.

His analysis noted three major pullbacks: the first saw a decline of 59.76%, the second dropped by 56.2%, and the most recent pullback registered a 58.25% drop. Based on this historical behavior, Tardigrade noted that the recent correction might be accompanied by another strong rebound. 

The last such a rebound happened, Dogecoin went on a 23,000% increase to reach its current all-time high of $0.73. From here, Trader Tardigrade predicted a similar playout to reach a price target of $2.

Image From X: Trader Tardigrade

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The $2 price target has been a recurring prediction among crypto analysts for Dogecoin. One similar prediction came from crypto analyst Dima Potts, who predicted that Dogecoin is poised to target all-time highs between $1.50 and $2.10. For now, the first step for a bullish Dogecoin would be to break above $0.3.

Featured image from Mudrex, chart from TradingView

Trendline channel patterns are a staple in technical analysis, helping traders to identify potential trade opportunities by charting trends within defined boundaries. These channels provide insight into market trends, offering strategic entry and exit points for traders. In this guide, we’ll explore how to identify, trade, and optimize the trendline channel pattern to improve your trading strategy.

By the end of this guide, you’ll have a solid understanding of how to trade channel patterns, recognize different types, and implement practical techniques to maximize your trading success.

What is a Trendline Channel?

Defining the Trendline Channel

A trendline channel pattern is formed by two parallel trendlines that encapsulate price movement within a market. These lines represent support and resistance levels, which mark the highs and lows that price consistently respects over a given period.

• The lower trendline acts as support, indicating a price level where buying pressure tends to prevent further declines.

• The upper trendline functions as resistance, marking a price ceiling where selling pressure typically prevents further gains.

For a channel to be valid, the price must touch each line at least twice, creating a visually discernible pattern. The parallel nature of these lines helps traders to predict future price movements and identify potential trading opportunities.

Types of Trendline Channels

Trendline channels can be categorized into three main types:

Ascending Channel (Bullish Pattern):

In an ascending channel, the price moves upwards within the channel, indicating a bullish trend. Both the support and resistance lines slope upwards. Traders often look for buying opportunities at the lower boundary (support) and take profits near the upper boundary (resistance).

Descending Channel (Bearish Pattern):

A descending channel reflects a bearish trend, where the price moves downward. Both support and resistance lines slope downwards. Traders can profit by selling near the upper boundary (resistance) and buying back near the lower boundary (support).

Horizontal Channel (Neutral Pattern):

In a horizontal channel, price moves sideways, with neither an upward nor downward bias. Both support and resistance lines are flat, representing a neutral market. Traders often buy at the lower boundary and sell at the upper boundary, capitalizing on the oscillation within the range.

You may also refer to sideways channels to double tops, or triple tops.

How to Identify a Trendline Channel

Drawing the Trendlines

To successfully trade a trendline channel pattern, the first step is accurately drawing the trendlines that mark the channel. Here’s a step-by-step guide:

Identify Swing Highs and Lows:

Start by spotting the key swing highs (peaks) and swing lows (troughs) on your chart. These are critical points where the price reverses direction.

Connect the Lows and Highs:

Draw a line connecting at least two consecutive lows to create the support line, and another connecting at least two highs to form the resistance line. Ensure both lines are parallel, forming the channel.

It is ok if trendlines cut through candlestick wicks and even through candlestick bodies at times. However, you do not want to see that the price is able to trade outside of the trendline for too long – when the price is reversing back into the channel quickly, it can be considered a valid trendline and channel. We will talk about trendline fakeouts later.

Tips for Valid Touchpoints

To confirm the validity of your trendline channel, look for multiple touchpoints—price should hit the support and resistance lines at least twice, creating a consistent pattern. The more touchpoints, the stronger the channel’s reliability.

Recognizing Valid Channels

To avoid trading false channels, follow these rules for confirmation:

1. Minimum Touches:

   A valid trendline channel should have at least two touches on both the support and resistance lines.

2. Consistent Price Movement:

   The price should consistently move between the two lines, respecting the boundaries with limited false breaks.

3. Timeframes:

   Channels can form on various timeframes, from intraday to weekly charts. For short-term traders, daily or 4-hour charts work well, while long-term traders may prefer weekly or monthly charts to confirm broader trends.

How to Trade a Trendline Channel

Entry Strategies for Trendline Channels

Once you’ve identified a valid channel, the next step is to plan your entry points. Here are two common strategies:

Buying at Support, Selling at Resistance

The most straightforward approach is to buy when the price hits the lower trendline (support) and sell when it reaches the upper trendline (resistance).

You can also choose to only trade bullish signals at the support trendline within an upward channel – filtering out bearish signals against the ongoing trend. And vice versa.

Trading the Mid-Line

The midline of a trendline channel also carries some importance – especially on higher timeframe channels that are wide. The price will often bounce at the mid-line, providing further support and resistance levels. Those levels can be great confluence levels on lower timeframes.

Trendline Channel Breakout Strategy

Trendline channels don’t last forever, and eventually, the price may break out of the channel. Here’s how to approach these scenarios:

Trading the Breakout:

When the price breaks through either the support or resistance line, it signals the potential start of a new trend. Traders can enter the market after a breakout confirmation or wait for a retest of the broken level before entering.

Trading Channel Fakeouts

As mentioned channel fakeouts are common and, therefore, many traders choose to follow a fakeout strategy. For this, the trader is ignoring the breakout signal and, instead, wait for the price to move back into the channel. Ideally, you the move back into the channel should occur with high momentum (large candlesticks) to signal the strong fakeout force.

Stop Loss and Take Profit Placements

Effective risk management is essential when trading trendline channels. Here’s how to set stop losses and take profits:

Stop Loss Placement

Set your stop loss slightly outside the trendline—below the lower boundary (support) for long trades and above the upper boundary (resistance) for short trades. This reduces the risk of being stopped out by market noise or false breakouts.

Take Profit Levels

Calculate your take profit based on the channel width. If the channel is 100 pips wide, aim to take profit near that level from your entry. Using the width of the channel helps ensure that your risk-to-reward ratio remains favorable.

Other target approaches can include a fixed Reward:Risk ratio. For that, you set your stop loss as explained above and then take a multiple of the stop loss distance as your take profit level. If your stop loss is 50 pips away from your entry, your take profit is set at 100 points, providing a 2:1 Reward:Risk ratio.

Final Tips for Trading the Trendline Channel Successfully

Practice in a Demo Account

Before jumping into live trading, it’s crucial to test your channel trading strategy in a demo account. Trading on a demo account is also great for practicing and improving your pattern recognition without the pressure of real money trading.

Continuously Refine Your Strategy

Trading is a dynamic process, and strategies that work today might need adjustments in the future. Keeping a trading journal can help you track your trades, evaluate your performance, and refine your strategy over time. Regularly reviewing your trading data will help you identify areas for improvement and keep you on the path to success.

Frequently Asked Questions (FAQs)

Q1: What is the best timeframe for trading trendline channels?
The ideal timeframe depends on your trading style. Day traders may prefer 15-minute to 1-hour charts, while swing traders often use 4-hour or daily charts. Longer-term traders might opt for weekly or monthly charts to capture broader trends.

Q2: How do you know if a trendline channel is valid?
A valid trendline channel requires at least two touches on both the support and resistance lines, along with consistent price movement between them. A higher number of touches typically increases the reliability of the channel.

Q3: Can you use trendline channels in conjunction with other patterns?
Yes, trendline channels can be combined with other chart patterns, such as triangles, flags, or head and shoulders, to create more robust trading setups.

Q4: Is it possible to trade channels in volatile markets?
While more challenging, channel trading is possible in volatile markets. However, you must be cautious of false breakouts and wider price swings, which can make risk management trickier.

Conclusion

Mastering the trendline channel pattern can significantly enhance your trading strategy. Whether you’re trading in a bullish, bearish, or neutral market, these channels provide clear entry and exit points, helping you capitalize on price movements. Remember to practice in a demo account, continuously refine your strategy, and employ strong risk management techniques to increase your chances of success.

Trendlines can be great trading tools if used correctly and in this post, I am going to share three powerful trendline strategies with you.

But first, keep in mind the two most important concepts when it comes to drawing and using trendlines:

1. A confirmed trendline has 3 touchpoints
   You can always connect any two random points on your charts but only if you have a third one, you are dealing with a validated and active trendline.
2. Never cut through the bodies
   It is OK to cut through the candlestick wicks when drawing a trendline, but never cut through the bodies!

#1 Break and Retest

The break and retest strategy is quite a common strategy used by many different traders. 

The idea is that once you identified an active trendline, you wait for the price to break out of it. Sometimes, the price will just run away and the price won’t look back. However, if the price trades back into the trendline, the retest can often be traded as a high probability setup. The timing can be done on a lower timeframe or directly on the same timeframe where you identified the trendline.

The trendline acts as both the entry trigger and also helps to place stops. The stop loss is generally placed on the other side of the trendline and the trendline acts as a protection level between the entry price and the stop loss.

The more touchpoints a trendline has, the better it is suited for the break and retest strategy. In the example below, the trendline has at least 3/4 valid touchpoints. During the breakout, there was a lot of volatility in the market and the price hovered around the trendline for quite a while.

The level of aggressiveness of the trader determines how early the entry will be taken. An aggressive and more risk-seeking trader could get into a trade as soon as the price touches the trendline. A more conservative trader would wait for the price to pull away from the trendline and exhibit signs of momentum into the trade direction.

There is no right or wrong and entry timing depends on the preferences of the trader.

#2 Trendline Flag

Whereas Break & Retest scenarios can be considered reversal trading or early trend-following, flags classify as regular or late trend-following.

With flags trading, you look for an established trend and then wait for a consolidation/pullback. If you can describe the pullback with a trendline, then it may be possible to trade such a flag once the price has broken the trendline and resumed trading into the trend direction.

In the screenshot below, the price was first in a downtrend before the trend paused and established a flag defined by the trendline. Here, we can gain additional insights into the market participants; whereas the initial downtrend was strong and the price fell quickly during a short period of time, the bullish flag patterns only showed weak buying interest. Comparing the trend intensity can help with understanding how likely a trendline break might be. In this example, the downtrend was significantly stronger than the bullish flag pattern which means a higher likelihood for a trend continuation lower.

It is also possible to add a longer-term moving average to your charts when it comes to flag trading. The 50 MA helps identifying the long-term trend and such a trader would only look for flag patterns that signal a continuation into the trend direction.

In the screenshot below, the moving average indicates a downtrend because the price was trading below the moving average. The flag pattern indicates a temporary pause and the break of the trendline confirmed the trend continuation.

#3 Trendline Bounce

Trendline bounces are also trend-following trading approaches. In contrast to the flag pattern, the trendline is not used to time trade entries, but to identify scenarios where the trendline is acting as support or resistance.

In the screenshot below, the price bounced off the trendline for the 3rd consecutive time, confirming the validity of the trendline. Then, traders would look for other technical patterns around the bounce to time trade entries. In this case, the price has established a horizontal resistance level around the trendine bounce. The horizontal level then allows to time the trades after a breakout.

In this strategy, the trader could either be extra conservative and place the stop loss all the way below the trendline, or use a stop loss below the resistance level.

Again, there is no right or wrong. It all depends on the risk appetite of the trader. I wrote about stop loss techniques before.

Trendline bounces may also be used in a multi-timeframe approach and once a long-term trendline has been established, like in the screenshot below, a trader could then move to the lower timeframes and time his trades using other technical concepts.

In the following, we are going to take a look at the situation on the lower timeframe for the two trendline bounce scenarios that I marked with red arrows.

On the left, we see the first bounce (first arrow). The price action was rather messy here so probably no trade entry would have taken place here.

On the right, the price provided a Head and Shoulders structure and with the help of another, short-term trendline, the trader could have timed the trade.

Using a multi-timeframe approach can help some traders get into trades earlier and also find higher reward-risk-ratio scenarios. However, you can also trade the trendline bounce directly on the higher timeframe if a favorable candlestick pattern is present.

Trendlines can be great tools to have in your toolbox as traders and some people find them to be more reliable than regular, horizontal support/resistance.