Reading time: ~2 m
The price of Dogecoin (DOGE) is in danger of breaking the line of long-term upward support that has been present on the chart for almost a year
A bearish breakdown could trigger a sharp drop in the DOGE rate. However, the short-term indicators indicate that the price will start to bounce first.
Dogecoin returns to long-term support
The coin of the Dogecoin project is one of the most recognizable “calling cards” of the crypto market and has many fans. Although it appeared in 2013 as a joke coin, many already believe that DOGE has outgrown the status of a mere meme.
As the results of the technical analysis of the daily timeframe show, the DOGE price has returned to the ascending support line, which has been present on the chart since June 2022. This line is of great importance because it remains unbroken for such a long period of time.
The decline towards the support line began on April 4, when the price bounced from the $0.096 resistance area (red icon), forming a long upper wick. Such wicks are considered a sign of pressure from sellers and demonstrate that buyers cannot support the price.
Source: Trading View
The Relative Strength Index (RSI) is tilting in favor of the bearish sentiment as it is still holding below the 50 mark, albeit rising. This is a momentum indicator indicating overbought/oversold and bullish/bearish market sentiment, depending on whether it is above or below the 50 mark.
The RSI has remained below 50 since the bearish break of this line on April 17 (red circle).
Should we expect a rebound from DOGE
Meanwhile, wave analysis of the shorter 6-hour chart paints a bullish picture for DOGE.
Wave analysis suggests that the price has completed the formation of a five-wave bearish structure (in white), which has taken the form of a wedge. Therefore, we are most likely dealing with a leading diagonal pattern.
After such five-wave formations, the price usually retrace a significant part of the previous decline. Thus, if a correction starts, the most likely candidate for the role of resistance will be $0.091 (Fibo level 0.618).
Source: Trading View
Despite this bullish near-term outlook, a drop below $0.069 would mean that DOGE is still correcting, even in the short term.
In this case, the most likely scenario would be a breakdown of the long-term ascending support line and a fall towards $0.057.
#DOGE #300day #support #sink #swim