In a surprising turn of events, Dogecoin (DOGE) has experienced a swift price increase since October 18, managing to break free from both long- and short-term descending resistance trend lines. The breakout, however, raises the question: Will the price of Dogecoin now accelerate its upward trajectory?
Breaking the Chains: Dogecoin’s Journey Beyond Resistance
Analyzing Dogecoin’s weekly timeframe, it becomes apparent that the cryptocurrency had been confined under a long-term descending resistance trend line since its all-time high in May 2021. This descent led to a low point of $0.049 in June 2022. Despite attempts to break free, the price faced resistance, resulting in lower highs and notable signs of selling pressure.
However, November brought a significant shift. Dogecoin finally managed to break out from the trend line that had constrained it for more than 900 days. Despite this breakthrough, the weekly Relative Strength Index (RSI), a crucial momentum indicator, has yet to conclusively confirm the direction of the trend.
The RSI, which indicates whether an asset is overbought or oversold, holds significance for traders. Bulls typically have an advantage when the RSI reading is above 50 and trending upward. Currently, while the RSI has moved above 50, it has not yet closed, leaving room for speculation about the strength of the bullish momentum.
Market Sentiment: Bulls on the Rise
Cryptocurrency analysts on the platform X have expressed a decisive bullish sentiment towards Dogecoin. Notably, Xnaeemmr pointed to a bullish cup and handle pattern, predicting a significant price increase following a breakout. Wais_taherian, while also bullish, advocates caution, suggesting waiting for a breakout and re-test before entering the trade. CryptoKaleo utilized a fractal analysis, hinting at the potential for Dogecoin’s price surge to go parabolic in the near future.
Navigating the Daily Landscape: Signs of Retracement
Despite the weekly bullish outlook, the daily timeframe introduces a note of caution. The daily RSI has generated a bearish divergence, indicating a potential retracement as a momentum decrease accompanies the recent price increase. If this scenario unfolds, Dogecoin could experience a 9% decrease, reaching the nearest support level at $0.067.
However, even in the face of this bearish prediction, an upward movement beyond the November high of $0.078 could signal the completion of the correction. In such a case, a 30% increase to the next resistance level at $0.100 becomes a plausible expectation.
As Dogecoin enthusiasts and traders alike closely monitor these developments, the cryptocurrency remains in the spotlight, leaving the question of its future trajectory hanging in the balance.