Dogecoin DOGE Price Risks Breakdown From Long-Term Pattern
The price of DOGE is currently facing the possibility of a breakdown from a descending triangle pattern that has been developing over the long term. If this breakdown occurs, it could result in a significant 50% decrease in the price of DOGE.
However, when we shift our focus to the daily timeframe, there are more optimistic indicators that suggest the potential for a reversal in the current bearish trend.
Weekly Analysis: Support Level and Descending Resistance Trendline
In the weekly technical analysis, it is observed that DOGE’s price has remained slightly above the $0.059 support level since June 2022. This support level has been confirmed multiple times, making it quite significant. The most recent confirmations showed increased buying activity.
However, DOGE has been under pressure due to a descending resistance trendline that has been in place since November 2022. This trendline, combined with the $0.059 support level, forms a descending triangle pattern which is typically seen as bearish. The price has established lower highs during this period, indicating a loss of upward momentum.
Potential Breakdown and Price Targets
If there is a breakdown that covers the entire height of the descending triangle pattern, it could potentially push DOGE’s price down to $0.030, resulting in a drop of roughly 50%. To confirm this breakdown, DOGE must close below the $0.059 horizontal support level. On the other hand, returning to the descending resistance line would be an increase of 16%.
Weekly RSI and News Impact
The weekly Relative Strength Index (RSI) aligns with the idea of a possible breakdown, as it is currently below the 50 mark and declining, indicating a bearish trend. In other news, FTX is set to liquidate many crypto assets, but it does not have plans to liquidate any Dogecoin holdings.
DOGE Price Prediction: Can Bullish Pattern Spark Reversal?
While the weekly timeframe is bearish, the daily timeframe allows for the possibility of a bullish trend reversal. Since August 17, DOGE has formed a double bottom pattern, which is considered a bullish pattern that often leads to upward movements. The daily RSI confirmed a bullish divergence, indicating potential upward momentum.
However, the price has yet to initiate its increase and bounce from the $0.059 support area. These bullish signs may only result in a short-term reversal with an increase to the long-term resistance line at $0.070 before another downward movement.
Closing Thoughts: DOGE Price Prediction
The future direction of DOGE’s price will be determined by whether it bounces at the $0.059 support area or closes below it. A bounce could lead to a 15% increase, while a close below the area could trigger a significant 50% plunge.
For BeInCrypto’s latest crypto market analysis, click here.
Hot Take: The Future of DOGE Hangs in the Balance
The current technical analysis suggests that Dogecoin’s price is at a critical juncture. The descending triangle pattern on the long-term chart indicates the potential for a significant breakdown and a 50% drop in price. However, there are also optimistic indicators on the daily timeframe that suggest a possible reversal. The support level and descending resistance trendline play crucial roles in determining DOGE’s future direction. Traders should closely monitor price movements and key levels to make informed decisions. The upcoming bounce or breakdown will have a significant impact on the market sentiment surrounding DOGE.
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