Dogecoin (DOGE) rebounded on shorter timeframes, leading to a break of diagonal resistance. However, there are still notable concerns in the market regarding the long-term prospects of the coin.
The DOGE price is trying to break an important Fibonacci resistance level.
The DOGE price is trying to break an important Fibonacci resistance level. Such a breakthrough would confirm the beginning of a bullish reversal, promising new highs.
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Dogecoin consolidates under long-term resistance
The Dogecoin project Dogecoin is one of the most recognizable “calling cards” of the crypto market and has many fans. Although it appeared in 2013 as a meme coin, many already believe that DOGE has outgrown the status of a mere meme.
As the results of technical analysis of the weekly chart show, the price of DOGE has been declining under a downward resistance line since it reached an all-time high of $0.739 in May 2021. The decline culminated in a low of $0.049 in June 2022.
After that, the DOGE price rebounded and has been trading above the $0.060 horizontal area ever since. However, it never broke through the line of long-term downward resistance. This line has been on the chart for 791 days.
The weekly RSI is giving indefinite signals. This index is rising, but is still below the 50 level, indicating a lack of a clear directional trend. To confirm a bullish trend, a break of the RSI above 50 combined with a bullish break of the DOGE downward resistance line by the price is required.
The price of the DOGE is also required to confirm a bullish trend.
Source: TradingView
DOGE recovers after false bearish breakout
Technical analysis of Dogecoin on the daily timeframe outlines a bullish picture. The main reason for this is the deviation of the price (green circle) below the horizontal area of $0.065 and the subsequent recovery above this level. Such moves are often followed by sharp rallies, as they indicate that the buyers took the upper hand after the sellers failed to make a bearish breakout.
The DOGE price then broke the 79-day downward resistance line.. This further confirms the likelihood that price has begun a bullish reversal. The DOGE is now trading just below the Fibo 0.382 retracement resistance at $0.073 because the first attempted bullish breakout was unsuccessful (red icon).
A break of the Fibo level of 0.382 would indicate that the trend has turned bullish. In this case, the next resistance will come into play at $0.086 (the Fibo level of the 0.618 correction).
Daily RSI supports the thesis of a bullish breakout and continuation of the uptrend. This indicator has made a bullish breakdown of the descending resistance line (green line) and is now above 50. Both of these signals are considered signs of a bullish trend.
Source: TradingView
Despite this bullish outlook, the market’s failure to break through the $0.073 area could lead to a retest of horizontal support at $0.065 and possibly the longer-term level of $0.060.
As long as that last level remains unbroken, however, the long-term bullish trend in DOGE will persist.