Dogecoin (DOGE) Price Surges – Is This a Temporary Relief or a Sign of a Bullish Reversal?
The recent bounce in the price of Dogecoin (DOGE) has sparked speculation about whether this is just a temporary relief or the start of a bullish reversal. After breaking out from a descending resistance trend line in November, DOGE experienced a significant increase in value. However, it has since fallen, leading to concerns about its long-term corrective pattern.
The weekly technical analysis reveals that DOGE has been on a swift upward trajectory since October 2023. The breakout from the resistance trend line after 400 days of consolidation indicated a potential bullish trend. In December, DOGE even reached a new yearly high of $0.107. However, four consecutive bearish weekly candlesticks ensued, causing a temporary downturn.
Fortunately, this week’s bounce in the Dogecoin price provides some relief. It has validated a horizontal resistance area as well as the previously broken descending trend line. Moreover, the weekly Relative Strength Index (RSI) supports the bounce. With a reading above 50 and an upward trend, the indicator suggests that bulls still have an advantage.
However, the daily chart paints a slightly different picture. While the weekly time frame indicates a possible bullish reversal, the daily chart leans towards a bearish trend. DOGE struggled to gain support above its resistance trend line after breaking out from an ascending parallel channel. Currently, the price trades just below the channel’s resistance trend line.
Intriguingly, the RSI is also attempting to move above the 50-trend line, which serves as resistance. Thus, whether the price will break out from the channel or face rejection will be crucial in determining the future trend of DOGE.
A successful breakout from the channel could lead to a 40% increase, with the next resistance at $0.115. Conversely, a rejection from the resistance trend line might result in a 28% drop, with the support trend line at $0.062.
As always, it is important to conduct thorough research and seek professional advice before making any financial decisions. Market conditions can change rapidly, so staying informed and cautious is essential.