Dogecoin broke through long-term resistance
The price of the popular memcoin DOGE has been moving along a long-term downward resistance line since April 2021. In June 2022, this decline brought the token to a low of $0.049.
After this, the price rebounded and made several unsuccessful breakout attempts (red icons) until it finally broke above this trend line in November 2023. The bullish breakout took DOGE to a new yearly high of $0.108 in December, marked just below a critical horizontal resistance area.
Following this, the price experienced a decline and failed to consolidate the annual high.
Source: TradingView
The RSI momentum indicator on the weekly chart is above the neutral level of 50, but has declined over the past two weeks and has dropped below 70, indicating a weakening trend.
DOGE forecast: can we anticipate a December rally?
Similar to the weekly timeframe, the daily chart does not provide clear clues about the direction of the trend. However, it is still tilted towards the bullish side, as indicated by the price action.
Since reaching its yearly high, Dogecoin has been trading within a descending parallel channel. These channels typically contain corrective movements, suggesting that a bullish breakout is the most likely outcome.
On December 18, the price bounced off the channel support line and the horizontal support area of $0.087, forming a long lower wick (green icon). Currently, DOGE is attempting to surpass the upper boundary of the channel.
Meanwhile, BeInCrypto Head of News Ali Martinez has observed a steady increase in the number of new addresses on the Dogecoin network. This surge in on-chain activity is a promising sign for DOGE.
However, the daily RSI still does not provide clear signals. The indicator is slightly above the neutral level of 50 but has been declining since the beginning of December.
Nonetheless, considering the price dynamics, a bullish breakout remains the most likely scenario. In this case, Dogecoin could climb by 11% to the next resistance level at $0.105.
Source: TradingView
Conversely, if DOGE fails to break out, it could trigger an 8% decline towards the nearest support level at $0.087.
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