Dogecoin experiences a decline following a rebound
The daily timeframe reveals that the popular memecoin has been declining since reaching a high of $0.107 on December 11, 2023. This decline has taken place within an ascending parallel channel that has been in existence since June 2023.
Despite bouncing off the midline of this pattern, Dogecoin has been pushed back twice by the resistance line (red icons) – on January 11 and 21, 2024, respectively. Currently, the token is once again trading near the midline of the channel.
Source: TradingView
The Daily Relative Strength Index (RSI) is indicating a bearish signal. The indicator is below the neutral level of 50 (red circle), which suggests a downward trend.
DOGE forecast: Can we anticipate a bearish breakout from the pattern?
Technical analysis on the six-hour timeframe indicates that DOGE has been declining below a descending resistance line since December 2023. Together with the horizontal support area of $0.077, this line forms a descending triangle, which is considered a bearish pattern.
Currently, Dogecoin is trading just above this support area, while the RSI index has dipped below 50 (red circle). Should a bearish breakout occur, DOGE’s price could drop by 27% to the nearest support zone at $0.057.
Source: TradingView
Despite this bearish outlook, a strong price bounce from the $0.077 area could trigger a bullish breakout of the resistance line and result in a 12% rally towards the next resistance at $0.087.
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