The Dogecoinย (DOGE) price is at danger of breaking down from a longstanding ascending support line in place for almost a year.
If a breakdown transpires, a sharp fall could follow. Nonetheless, short-term time frame readings suggest that the price will 1st initiate a bounce.
Dogecoinย (DOGE) Price Returns to Long-Term Support
The technical analysis from the daily time frame shows that the Dogecoinย (DOGE) price has returned to an ascending support line that has been in place since June 2022. The line holds tremendous significance since it has been in place for such a long period of time.
The decrease to the support line began on April 4, when the price was rejected by the $0.096 resistance area (red icon), creating a long upper wick. The wick is considered a sign of selling pressure since buyers could not sustain the increase.
The RSI reading is leaning bearish. By using the RSI as a momentum indicator, traders can determine whether a market is overbought or oversold and decide whether to accumulate or sell an investment.
If the RSI reading is over 50 and the tendency is upward, bulls have an advantage, but if the reading is below 50, the opposite is true.
Despiteย theย factย that the RSI is increasing, it remainsย under 50, as it has been since it broke down on April 17 (red circle).
Dogecoinย (DOGE) Price Prediction: Will a Bounce Ensue?
The readings from the six-hour time frame give a positiveย tendency Dogecoinย (DOGE) price prediction, at least for the short term. The main reason for this is the wave count.
The wave count shows a completed five-wave downward movement (white), which took a wedge shape. Hence, it is likely a leading diagonal.
After such five-wave movements, it is customary for the price to retrace a large portion of the previous decrease. And, if a retracement, comesย after, the possiblyย likely area to provide resistance will be at $0.091, the 0.618 Fib retracement resistance level.
Regardlessย of this positiveย tendency short-term prediction, a fall below $0.069 will mean that the price isย still correcting, even in the short term.
In that case, a breakdown from the longstanding ascending support line and a fall to $0.057 will be the possiblyย likely scenario.
