Dogecoin Price Falls Below Support Level
The price of Dogecoin (DOGE) has been in decline since July 25 and recently broke down from its horizontal support on October 9. However, the cryptocurrency still has the backing of a longer-term level. The question now is whether DOGE will be able to recover.
Dogecoin Breaks Down From Critical Level
Technical analysis of the daily chart reveals that DOGE has maintained a price level above $0.060 since June 10. Additionally, it shows that DOGE has been following a downward-sloping resistance trendline since July 25. These two factors create a descending triangle pattern, which is typically considered bearish.
On October 9, the price of Dogecoin experienced increased volatility and dropped below the support level. This led to a low point of $0.057, the lowest price since August 17.
However, yesterday’s bounce in DOGE’s price could not be sustained, resulting in a further decrease.
RSI Indicates Bearish Trend
The daily Relative Strength Index (RSI) shows a bearish trend. RSI is a momentum indicator used to assess whether the market is overbought or oversold, providing guidance on buying or selling an asset.
Currently, the RSI is below 50 and declining, indicating a bearish sentiment. Additionally, the indicator has broken below its bullish divergence trendline.
DOGE Price Prediction: What Happens After the Breakdown?
The weekly analysis also suggests a negative outlook for DOGE, based on two primary reasons.
Firstly, the DOGE price is currently within a larger descending triangle pattern with its base at $0.057. This pattern is typically seen as bearish. If there is a breakdown that encompasses the entire height of the triangle, the price could drop to $0.020, representing a 67% decline from the current price.
The 1.27 Fibonacci extension level further reinforces this potential bottom at $0.020 according to Fibonacci retracement theory.
Despite this bearish prediction, if DOGE experiences a significant rebound from the long-term horizontal support level at $0.057, it could potentially result in a 16% increase towards the long-term descending resistance trendline at $0.070.
Hot Take: DOGE Faces Uphill Battle for Recovery
The recent breakdown in Dogecoin’s price and its bearish technical indicators suggest a challenging road to recovery. With the price falling below key support levels and the RSI indicating a bearish trend, DOGE faces significant downward pressure.
While there is a possibility of a rebound from the long-term support level, it would require a substantial effort to overcome the bearish patterns and reach higher resistance levels. Traders and investors should closely monitor DOGE’s price movement and consider the potential risks before making any decisions.
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