Dogecoin is trading near the resistance line of the descending parallel channel. A bullish break out of it could trigger a rapid rise in DOGE
Earlier this week, the popular meme coin Dogecoin (DOGE) was in the spotlight amid news that Tesla and SpaceX founder Elon Musk asked a US court to dismiss a $258 billion lawsuit that accuses the billionaire of running a pyramid scheme to support the Dogecoin cryptocurrency project..
Lawyers for Musk and Tesla called the investor lawsuit a “bizarre fabrication” over Musk’s “harmless and often silly tweets” about the coin.
The results of the technical analysis of the weekly timeframe show that the price of the coin has been declining along the descending resistance line since May 2021. As a result, in June 2022, DOGE hit a low of $0.049. After that, the coin began to grow.
During the week of October 24-31, 2022 (green icon), the market bullishly broke through the descending resistance line and the $0.076 resistance area. This allowed Dogecoin to reach a high of $0.158 a week later.. This mark still remains unbroken.
In general, after the bullish breakout, the token could not start a steady growth in any way and stomped in the range of $0.125 – $0.076, and at the same time gravitated towards the lower mark more.
In addition, the weekly RSI dipped below 50, which is a sign of a bearish trend. As a result, the weekly timeframe cannot determine with certainty the further direction of the DOGE trend.
The daily chart is leaning towards the bullish scenario for several reasons.. First, the price bounced off the long-term upward support line (dotted line). It happened on March 10 (green badge).
In the process of growth, the token has reached the resistance line of the descending parallel channel (red icon). Such channels are usually associated with corrective movements.. Finally, the daily RSI rose above the 50 mark, which is a bullish signal.
Accordingly, the daily time frame promises the DOGE rate a bullish breakout from the parallel channel and growth in the direction of $0.125.
Thus, the most likely forecast for Dogecoin promises the market growth towards the upper limit of the $0.125 range.. A bullish breakout from the descending channel would confirm this scenario..
However, a DOGE close below $0.076 support will neutralize the bullish outlook and could trigger a fall towards $0.055.