Dogecoin’s price has broken free from a lengthy descending resistance line, though the lack of a substantial price surge post-breakout raises concerns about its future trajectory. The short-term movement remains inconclusive, leaving room for doubts regarding the legitimacy of the breakout.
Struggles in Price Momentum
Analyzing the weekly timeframe, DOGE had been under a descending resistance line since hitting its all-time high of $0.739 in May 2021. After bottoming at $0.049 in June 2022, the price attempted a rebound but was thwarted by both the resistance line and the $0.15 resistance zone (red icon), as well as the resistance line alone (white icons).
DOGE/USDT Weekly Chart. Source: TradingView
On July 15, 2023, DOGE finally broke free from the 805-day resistance line, a similar pattern seen in the DOGE/BTC pair. However, despite the historical trend of major price surges following such breakouts, DOGE has instead remained near its breakout level.
Critical Levels and Indicators
Achieving the $0.150 resistance presents a 100% upward movement opportunity, while a decline to the $0.060 support zone implies a 20% drop. Weekly Relative Strength Index (RSI) readings, often used to gauge market sentiment, have lingered around 50 (neutral trend) for the past three weeks.
Daily Trends and Predictions
On the daily front, DOGE recently broke the 265-day descending resistance line on July 24 and confirmed it as support on August 4 (green icon). However, the failure to capitalize on this breakout is notable. Furthermore, the current breakdown from a rising parallel channel that formed since June suggests a potential 25% decline to reach the June low of $0.055.
DOGE/USDT Daily Chart. Source: TradingView
Similar to the weekly RSI, the daily indicator hovers slightly above the 50 line, making it challenging to forecast the future direction.
Anticipating Breakout Potential
Despite the bearish scenario, a channel breakout could trigger a substantial long-term surge. In such a case, DOGE might experience a 100% upswing, targeting the next long-term resistance at $0.150.