Tron-based meme coin Sundog (SUNDOG) has surged by 8% in the past 24 hours, breaking above a falling wedge pattern it had traded within since September. 

However, BeInCrypto’s analysis of the meme coin’s technical setup indicates that the recent rally could be a false breakout. This assessment dives into the reasons behind it and outlines key signals for SUNDOG holders to watch closely.

SUNDOG’s Surge May Cause a Bull Trap

An assessment of the SUNDOG/USD one-day chart has revealed that the meme coin broke above the upper line of its falling wedge during Thursday’s intraday trading session. This pattern is formed when an asset’s price moves between two descending trend lines, with the upper line acting as resistance and the lower line as support.

A breakout above the wedge’s upper trendline is a bullish move. It suggests buyers are gaining strength over sellers and hints at a sustained price increase. However, a closer look at some of SUNDOG’s momentum indicators suggests that this rally may be a false breakout, potentially setting up a bull trap.

A bull trap occurs when an asset’s price briefly breaks above a key resistance level which would usually signify a positive shift in trend. However, instead of continuing the uptrend, the price falls again, ‘trapping” those who bought in on the bullish signal. 

The setup of SUNDOG’s Super Trend Line is a notable indicator of this potential bull trap. At press time, the red line of the indicator rests above SUNDOG’s price. 

The Super Trend indicator tracks the overall direction and strength of an asset’s price trend. It appears as a line on the price chart that changes color according to the trend’s direction: green for an uptrend and red for a downtrend. 

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Author: Abiodun Oladokun