The Dogecoin (DOGE) Price and Its Recent Performance
The price of Dogecoin has been gradually declining since reaching its yearly high on December 11. However, it is still higher than at the beginning of December. The question now is whether the last week of the month will be bullish or not.
Dogecoin Breaks Out from Long-Term Resistance
For most of 2021, the DOGE price was trading below a long-term descending resistance trend line. It reached a low point in June 2022 before bouncing back and attempting multiple breakouts without success. However, in November 2023, it finally broke above the trend line and reached a new yearly high in December. Since then, the price has fallen but remains above its previous levels.
RSI Indicates Weakening Trend
The Relative Strength Index (RSI) can be used as a momentum indicator to determine whether a market is overbought or oversold. In the case of DOGE, an RSI reading above 50 with an upward trend indicates an advantage for bulls, while a reading below 50 suggests the opposite. Currently, the weekly RSI is above 50 but has been decreasing in the past two weeks, indicating a weakening trend.
DOGE Price Prediction: Potential December Rally
Looking at the daily time frame, there are no decisive clues about the direction of the trend. However, based on price action, it leans towards a bullish outlook. DOGE has been trading within a descending parallel channel since its yearly high. These channels usually contain corrective movements and often lead to eventual breakouts. On December 18, DOGE bounced off the channel’s support trend line and a horizontal support area, indicating potential for a breakout from the channel.
Increase in Network Activity
According to a tweet by Ali Martinez, the Global Head of News at BeIn Crypto, there has been a steady rise in the creation of new DOGE addresses. This increase in network activity is seen as a promising sign for DOGE’s future performance.
Potential Breakout Scenario
While the daily RSI is undetermined, a breakout from the descending parallel channel remains the most likely scenario based on price action. If DOGE breaks out, it could see an 11% increase to the next resistance level at $0.105. However, if a breakout fails to occur, there could be an 8% decrease to the closest support level at $0.087.
Hot Take: The Future of DOGE
Despite its recent decline, Dogecoin continues to show potential for a bullish rally in December. The breakout from long-term resistance and the increase in network activity are positive indicators for DOGE’s future performance. However, traders should closely monitor key levels and indicators to make informed decisions about accumulating or selling DOGE.
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