The price of Dogecoin (DOGE) is in danger of breaking the long-term upward support line that has been present on the chart for almost a year
A bearish break could trigger a sharp drop in DOGE. However, short-term timeframe indicators indicate that the price will start to bounce first.
The Dogecoin is back to long-term support.
Dogecoin returns to long-term support
The Dogecoin project is one of the most recognizable “calling cards” of the crypto market and has many fans.
Although it appeared in 2013 as a joke coin, many already believe that DOGE has outgrown the status of a mere meme.
As the results of technical analysis of the daily timeframe show, the price of DOGE has returned to the ascending support line, which has been present on the chart since June 2022.
This line has tremendous significance because it has remained unbroken for such a long period of time.
The decline towards the support line started on April 4, when price rebounded from the $0.096 resistance area (red icon), forming a long upper wick.
Such wicks are considered a sign of pressure from sellers and demonstrate that buyers cannot support the price.
The Relative Strength Index (RSI) is leaning in favor of bearish sentiment as it is still holding below the 50 mark, although it is rising.
It is a momentum indicator which indicates whether the market is overbought/oversold and bullish/bearish, depending on whether it is above or below 50.
The RSI has been below 50 since the bearish breakout of this line on April 17 (red circle).
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Should we expect a bounce from DOGE?
In the meantime, wave analysis of the shorter 6-hour chart outlines a bullish picture for DOGE.
Wave analysis suggests that the price has completed the formation of a five-wave bearish structure (white), which has taken the form of a wedge.
Consequently, we are most likely dealing with a leading diagonal pattern.
After such five-wave formations, the price usually rolls back a significant portion of the previous decline.
Thus, if correction starts, the most probable candidate for resistance will be $0.091 (Fibo level of 0.618).
Despite this bullish short-term outlook, a drop below $0.069 would mean that DOGE is still correcting, even in the short term.
In that case, the most likely scenario would be a break of the long-term upside support line and a drop to $0.057.