Dogecoin Price Hits New Low, But Shows Bullish Pattern
The price of Dogecoin (DOGE) has been on a decline since December 11, 2023, reaching a new low today. However, despite the decrease, there are indications of a short-term bullish pattern that could potentially lead to a reversal.
Dogecoin Bounces Back After Sharp Decrease
On the daily time frame, the technical analysis reveals that the DOGE price broke out from an ascending parallel channel on November 6, 2023. This breakout resulted in a high of $0.108 on December 11. Since then, the price has fallen and reached a low of $0.074 today. This low created a lower wick, confirming the support level at the 0.618 Fib retracement and the resistance trend line of the ascending channel.
Daily RSI Indicates No Positive Signs
Despite the bounce in price, the daily Relative Strength Index (RSI) does not show any positive signs. The RSI is used by market traders as a momentum indicator to identify overbought or oversold conditions and make decisions regarding asset accumulation or sale. A reading above 50 with an upward trend indicates an advantage for bulls, while readings below 50 suggest the opposite. Currently, the daily RSI is falling and is below 50.
DOGE Price Prediction: Will Bounce Mark the Local Bottom?
Looking at the six-hour time frame, there are bullish signs indicating that the DOGE price may experience a significant bounce. The price action and RSI readings support this prediction. The six-hour RSI shows a significant bullish divergence that often precedes upward movements. Additionally, there is a double bottom pattern in the Dogecoin price action, which is considered bullish. The presence of long lower wicks further reinforces the legitimacy of this pattern.
If the double bottom and bullish divergence materialize, it is possible for the DOGE price to increase by 13% and reach the descending resistance trend line at $0.089.
Hot Take: Bullish Reversal Possible for Dogecoin
Despite a recent decline, Dogecoin’s price shows signs of a potential bullish reversal. The break from an ascending parallel channel and the presence of a double bottom pattern indicate the possibility of an upward movement. However, caution should be exercised as the daily RSI is currently falling and below 50. If the bullish indicators hold true, the DOGE price could increase by 13%. On the other hand, if the double bottom fails and the price falls below today’s low of $0.074, a decrease of 15% to $0.067 is likely.
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