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While the Dogecoin (DOGE) price has bounced in lower time frames, clearing an important diagonal resistance, a distinct weakness exists in the long-term outlook.
The DOGE price is holding above the final horizontal support level before a significant fall. As a result, a decisive bounce at the current level is required in order to avoid a steep fall.
Dogecoin Price Bounces at 378-Day Support
The technical analysis from the weekly time frame shows that the DOGE price decreased significantly at the beginning of June, reaching the $0.06 horizontal support area.
This is a crucial area since it has been in place for 378 days. As a result, whether the price bounces above it or breaks down could be crucial in determining the future trend.
Even though the DOGE price initiated a bounce, it has not moved considerably above it yet. Moreover, a descending resistance line has been in place since February 2022.
Even though the DOGE price has bounced, the RSI provides a bearish reading. The RSI is a momentum indicator traders use to evaluate whether a market is overbought or oversold and to determine whether to accumulate or sell an asset.
Readings above 50 and an upward trend suggest that bulls still have an advantage, while readings below 50 indicate the opposite. The RSI has fallen below the 50 line and is decreasing. This is considered a sign of a bearish trend.
Will Dogecoin Price Prevent Breakdown?
Unlike the weekly time frame, the daily one does not provide a decisively bearish outlook. The main reason for this is the price action.
The DOGE price broke out from a descending resistance line that had been in place since April 3. While doing so, it also reclaimed the $0.065 horizontal support area.
It is currently in the process of validating the area as support (green circle). Whether it bounces at this level or breaks down will be crucial in determining the future trend.
If DOGE bounces, it can reach the 0.5 Fib retracement resistance level at $0.08. This would also take it to the long-term resistance line.
However, if the price breaks down, it will be expected to fall from the long-term $0.060 horizontal area. In that case, a drop to $0.050 could transpire.
Therefore, the future DOGE price prediction will determine whether DOGE bounces or breaks down from the minor $0.065 horizontal support area.
A bounce can increase the $0.080 resistance, while a breakdown could catalyze a steep fall.
For BeInCrypto’s latest crypto market analysis, click here.
Disclaimer
In line with the 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 accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.
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