Dogecoin has surpassed the 365-day resistance level, marking a significant breakthrough for the popular memecoin. For several months, DOGE has been attempting to break through this long-term horizontal resistance area, but it was unsuccessful until recently. On December 6, DOGE finally broke through and reached a new yearly high on December 11. However, the price could not sustain its growth and went back below the resistance level this week.
Looking at the daily RSI momentum indicator, there are mixed signals as the indicator has been declining but remains above the neutral 50 level. This suggests that the price movement is uncertain at the moment.
Analyzing the six-hour chart, it indicates that DOGE is likely to experience a corrective movement after the recent decline. The token has been trading within a descending parallel channel since December, which typically indicates a corrective phase. Therefore, the most probable scenario is a bullish breakout from this channel.
Yesterday, DOGE started an upward movement after bouncing off the channel support line and the horizontal support area of $0.087. Cryptocurrency trader ChiefraT predicts that this area will act as a bottom, and the token will soon begin to rise again. Currently, DOGE is trading near the top of the channel and approaching its resistance line, which aligns with the long-term resistance at $0.095 on the daily timeframe.
If there is a bullish breakout, DOGE could experience a 12% increase and reach the next resistance level at $0.105. On the other hand, a bearish breakout below the $0.087 area and the channel would signify a deeper correction. In this case, DOGE could fall by 23% and find support at $0.072.
It is important to note that the aforementioned analysis is based on available information and market trends. Cryptocurrency markets are known for their volatility, so it is always advised to exercise caution and perform thorough research before making any investment decisions.
Source: TradingView
Disclaimer: This information should not be construed as financial advice.