Dogecoin prices trade between key resistance and support levels. Breakthrough or decline is crucial for the direction of future trends
Dogecoin prices trade between key resistance and support levels. Breakthrough or decline is crucial for the direction of future trends.
The readings within the weekly and daily time ranges are inconclusive and cannot confirm the future trend of prices.
The price of Dogecoin is adjusted between the key diagonal and horizontal lines
According to the technical analysis of the weekly time frame, it was observed that the price of Doge had fallen below the downward resistance line after reaching a historical high of $0.739 in May 2021. This decline led to a low of $0.049 in June 2022.
Subsequently, the price of Doge rebounded (green icon) and has been trading above the $0.060 level support area. However, it has not successfully broken through the long-term downward resistance line that has existed for 798 days.
Recently, the price of Doge was rejected by the line last week (red icon). At present, the price is very close to the intersection of the horizontal support area and the downward resistance line. Therefore, decisive action is expected soon.
Doge/USDT weekly chart. Source:TradeingView
The weekly Relative strength index (RSI) readings are inconclusive. RSI is a momentum indicator used by traders to assess whether the market is overbought or oversold and make decisions to buy or sell assets.
The reading is above 50 and shows an upward trend, indicating that bulls still hold the advantage. On the contrary, a reading below 50 indicates the opposite situation.
Currently, RSI is on the rise, but still below 50, indicating an uncertain trend. To confirm the bullish trend, we need to see the RSI rise above 50 and the Doge break through the downward resistance line.
Doge price failed to maintain breakthrough
Although the weekly data is still unclear, the technical analysis of the price of Dogecoin within the daily time frame shows that the prospect is optimistic. This is mainly due to the deviation below the $0.065 level (green) and subsequent recovery. This deviation usually leads to a significant increase in prices, as it indicates that the buyer has controlled the price after the seller failed to attempt to cause the malfunction.
In addition, the price of Doge broke through the 79 day downward resistance line. This further supports the possibility of a bullish reversal. At present, the transaction price of Doge is slightly higher than the support area of $0.065. Previously, it was rejected by the 0.382 Fibonacci pullback resistance level of $0.073 (red icon).
The operation principle of Fibonacci's pullback level is that after a major price change in one direction, the price will often fall back or return to the previous level, and then continue to develop in the original direction. Therefore, breaking through the 0.382Fit level will strongly indicate a bullish trend.
If the meme currency successfully breaks through, the next resistance level will be $0.086, that is, 0.618 Fibonacci retreats to the resistance level.
The daily Relative strength index (RSI) supports breakthrough and continuous upward movement. This indicator has broken through the downward resistance line (displayed as the green line). However, the index is slightly below 50, which raises some doubts about the effectiveness of the breakthrough.
Doge/USD daily chart. Source:TradeingView
It is worth noting that if the Doge price fails to break through the $0.073 range, it may retest the $0.065 level support level and potential $0.060 long-term support level. Nevertheless, as long as the Doge price remains above the latter, the long-term trend remains bullish.
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