Dogecoin (DOGE) Hits New Yearly High, but Resistance Looms
The Dogecoin (DOGE) price reached a new yearly high of $0.106, signaling a bullish trend. However, the price fell slightly today, raising questions about the sustainability of the increase.
Dogecoin Approaches Long-Term Resistance
Technical analysis on the weekly time frame shows that DOGE broke out from a descending resistance trend line that had been in place for over 900 days. This breakout occurred after three unsuccessful attempts in the past. The recent increase led to a new yearly high close to a pivotal horizontal resistance area.
RSI Indicates Positive Trend
The Relative Strength Index (RSI), a momentum indicator, is currently above 50 and increasing, indicating a positive trend. It is worth noting that the RSI is approaching overbought territory, which previously preceded an increase toward the all-time high.
Is Increase Sustainable?
On the daily time frame chart, despite reaching a new yearly high, DOGE created a long upper wick on Wednesday, suggesting selling pressure. The price also trades within a resistance area that has been in place since the beginning of the year.
A cryptocurrency trader expressed concerns about the resistance level and chose to exit their position. However, the daily RSI remains bullish after breaking out from its bearish divergence trend line.
DOGE Price Prediction
The future of DOGE’s price depends on whether it can break out above the current resistance area. A successful breakout could lead to a 50% increase to the next resistance level at $0.145. Conversely, if there is a rejection, it could result in a 25% drop to the closest support at $0.070.
Hot Take: What Lies Ahead for DOGE?
The recent increase in the Dogecoin price has been impressive, but resistance levels and selling pressure pose challenges. Traders should closely monitor the RSI and price action to gauge whether the bullish trend will continue or if a reversal is on the horizon.
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