Dogecoin Fails to Break Out from Resistance Trend Line
The Dogecoin (DOGE) price was unable to surpass the resistance trend line of a corrective pattern last week. Determining the direction of the trend is challenging due to conflicting readings on the weekly and daily time frames.
Dogecoin Bounces at Previous Resistance
On the weekly time frame, technical analysis reveals that the DOGE price fell below a descending resistance trend line in October 2022, hitting a low in June 2023. However, Dogecoin has since experienced an increase.
After creating a higher low in October, the price of Dogecoin accelerated its rate of increase and broke out from the resistance trend line in November. This trend line had held for 400 days before the breakout. The price reached a new yearly high of $0.107 on December 11 before declining.
RSI Supports the Bounce
The Relative Strength Index (RSI) is used by traders as a momentum indicator to determine whether a market is overbought or oversold and whether to buy or sell an asset. The weekly RSI indicates support for the bounce as it rebounded at 50 while the price tested the resistance trend line.
DOGE Price Prediction: Can Price Reverse the Trend?
While the weekly chart suggests a bullish retest, the daily chart leans bearish. Since June 2023, Dogecoin has traded within an ascending parallel channel on the daily time frame. Although it broke out in December, it later retreated back into the channel in early 2024.
On January 11, DOGE validated the channel’s resistance trend line and fell. The future trend will depend on whether the price breaks out from the channel or falls below its midline.
WorldOfCharts Predicts Significant Increase
Cryptocurrency trader WorldOfCharts predicts a substantial increase in the DOGE price soon. Elon Musk, a well-known Dogecoin enthusiast, also confirmed that he still owns Dogecoin. However, the daily RSI provides a mixed reading as it is increasing but still below 50.
Breakout or Fall: Determining the Future Trend
A breakout from the channel could result in a 45% increase to the next resistance at $0.115. Conversely, falling below the channel’s midline may lead to a 25% decrease towards the support trend line at $0.062.
Hot Take: The Future of DOGE Hangs in Balance
The direction of Dogecoin’s trend remains uncertain as it faces resistance and support levels. Traders will be closely watching for a breakout from the channel or a fall below its midline to determine the future trajectory of DOGE’s price.
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