The Dogecoin price has made a bullish break of an important long-term resistance area. However, the move did not lead to a sharp rise as expected and the price is currently trading near pre-breakout levels. However, DOGE’s long-term prospects look optimistic.
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Dogecoin has broken through 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 emerged in 2013 as a meme coin, many already believe that DOGE has outgrown its status as a mere meme.
According to technical analysis of the weekly chart, after reaching an all-time high of $0.739 in May 2021, the DOGE exchange rate has been moving along a descending resistance line. This decline took the price to a low of $0.049 (green icon) in June 2022.
The price has fallen to a low of $0.049 (green icon) in June 2022.
After that, Dogecoin entered a recovery phase. It started trading above the $0.060 horizontal support level. After several failed attempts over a six-month period, on July 15 the price of DOGE finally broke through a resistance line that had been on the chart for an impressive 805 days.
After several failed attempts over a six-month period, the price of DOGE finally broke through a resistance line that had been on the chart for an impressive 805 days.
Some speculate that this rise could be related to the recent rebranding of Twitter by Elon Musk.
Breaks of such long-term patterns often lead to significant price gains because they signal the end of the previous trend. However, it is important to note that the expected growth has not yet occurred.
Source: TradingView
The weekly Relative Strength Index (RSI) readings do not allow us to draw a definitive conclusion. This momentum indicator went slightly above the 50 mark last week, but then continued to tread just above that area. Therefore, the further direction of the trend is still unclear.
A fall to the $0.060 support area would mean a 20% decline in DOGE, while a continuation of the upward movement could cause the price to rise by 100% to $0.150.
DOGE rises against BTC
The weekly timeframe for the DOGE/BTC pair also shows a bullish outlook due to two main reasons.
First, the price has recovered above the 230 satoshi area after previously diverging below it (green circle). Such deviations and recoveries are important bullish moves that often lead to significant price gains.
The significance of this move is reinforced by the fact that this area had been present for 900 days at the time of the deviation.
The significance of this move is reinforced by the fact that this area had been present on the chart for 900 days at the time of the deviation.
After that, the Dogecoin price made a breakdown of the descending resistance line, also suggesting that the trend is bullish.
After that, the Dogecoin price made a breakdown of the descending resistance line, also suggesting that the trend is bullish.
The RSI index, however, is not yet confirming the bullish trend. Although the indicator is rising, it is still below the 50 mark.
If the price continues to rise, the next resistance will come into play at 370 satoshi, which is 45% above the current levels.
And if the price continues to rise, the next resistance will come into play at 370 satoshi, which is 45% above the current levels.
Source: TradingView
Despite the bullish outlook, Dogecoin closing below the 230 satoshi and $0.060 areas, respectively, would mean that the trend remains bearish.