Dogecoin (DOGE) price is trading between critical horizontal support and resistance levels. Whether it breaks or goes down will be crucial to the direction of the future trend.
Readings on both the weekly and daily time frame are inconclusive, and fail to confirm the direction in which the price will move next.
Dogecoin price is consolidating between the main diagonal and horizontal levels
According to the technical analysis of the weekly time frame, it is seen that the price of DOGE fell below the descending resistance line after reaching an all-time high of $0.739 in May 2021. This drop led to a decline of $0.049 in June. 2022.
After that, DOGE price (green icon) rebounded and traded above the $0.060 horizontal support area. However, it has not yet been able to break out of the long-term descending resistance line, which has been in place for 798 days.
Recently, the DOGE price was rejected by the line last week (red symbol). The price is now trading near the meeting point of the horizontal support area and the descending resistance line. So, a decisive move is expected soon.
The weekly reading on the Relative Strength Index (RSI) is inconclusive. The RSI is a momentum indicator that traders use to assess whether a market is overbought or oversold, and to make decisions about whether to buy or sell an asset.
Readings above 50, along with a bullish trend, suggest that the bulls still have an advantage. On the contrary, readings less than 50 indicate the opposite.
At the moment, the RSI is rising but it is still below 50, which indicates an uncertain trend. To confirm the upside, we will need to see the RSI moving above 50 and the DOGE breaking the descending resistance line.
DOGE price failed to hold the breakout
While the weekly reading is not clear, the technical analysis of the Dogecoin price on the daily time frame indicates a positive outlook. This is primarily due to the deviation from the $0.065 horizontal level (green) and the subsequent recovery. These deviations often lead to large price increases because they indicate buyers taking control after a failed attempt by sellers to cause a crash.
Moreover, DOGE price broke out from the 79-day descending resistance line. This also supports the possibility of a bullish reversal. Currently, DOGE is trading slightly above the $0.065 support area, after being rejected by the 0.382 Fibonacci retracement resistance level at $0.073 (red icon).
Fibonacci retracement levels work on the principle that after a significant price change in one direction, the price tends to correct or revisit the previous level before continuing in its original direction. Therefore, a move above 0.382 Fibonacci level will strongly suggest an upward trend.
If the meme coin is successfully breached, the next resistance level will be at $0.086 represented by the 0.618 Fibonacci retracement resistance level.
The daily Relative Strength Index (RSI) supports the breakout and the sustained bullish movement. The indicator broke from the descending resistance line (shown as a green line). But it fell slightly below 50, which casts some doubt on the validity of the hack.
It is important to note that if DOGE price fails to break above $0.073 area, there might be another test of the $0.065 horizontal support level and possibly the long-term support level $0.060. However, as long as the price of DOGE remains above the latter, the long-term trend remains bullish.
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In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to providing accurate and unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions.