Tron-based meme coin Sundog (SUNDOG) jumped 8% in the past 24 hours, breaking out of a falling wedge pattern that has held since September. While this breakout is typically bullish, analysts warn it could be a false signal, possibly setting up a bull trap.
SUNDOG Breaks Out, But Is It Sustainable?
On the SUNDOG/USD one-day chart, the coin broke above the upper trendline of the falling wedge during Thursday’s trading session. A falling wedge forms when prices move between two descending lines, with the upper acting as resistance and the lower as support.
A breakout above the upper line usually signals bullish momentum, suggesting buyers have gained control. However, a deeper analysis of SUNDOG’s momentum indicators hints that this rally may not be what it seems. Instead, it could be a bull trap, where prices break resistance but then reverse, catching optimistic buyers off guard.
Bull Trap Concerns: Super Trend and BoP Indicators
The Super Trend indicator shows potential bearish pressure on SUNDOG. Currently, the red Super Trend line sits above the price, indicating a downtrend. This indicator typically turns green during uptrends and red during downtrends. When the line is above the price, it suggests bearish momentum.
Adding to this concern is the Balance of Power (BoP) indicator, which shows a negative reading of -0.82. This negative value suggests sellers are dominating the market, even as the price ticks upward.
SUNDOG Price Prediction: Bull Trap or Rally?
If the price retests the breakout level and fails due to strong bearish signals, the current rally could turn into a bull trap. SUNDOG is trading at $0.13 as of now. A reversal may push its price down to the support level at $0.09. Conversely, if the uptrend holds, SUNDOG could aim for a rally toward $0.20.
Key Takeaway for Traders
SUNDOG’s recent breakout may seem promising, but several technical indicators suggest caution. Keep an eye on the Super Trend and BoP readings, as they signal potential market weakness. The next few sessions will be crucial to determine if this rally can sustain or if a reversal is imminent.
Traders should watch for a confirmed retest of the breakout level. A strong Bitcoin rally could also impact SUNDOG’s momentum, so stay tuned to broader market movements.
