Dogecoin (DOGE) price was affected by the recent drop in Bitcoin, resulting in a sharp decline that continued the downward trend since December 2023. Despite the drop, Dogecoin’s price is still moving within the boundaries of a short-term formation. The question is whether it can bounce back from its current position or if a potential break could deepen the decline.
Current State of Dogecoin
Since April 2021, DOGE’s price has been following a decreasing resistance trend line. In June 2022, the price reached a disappointing low of $0.049. Despite several unsuccessful attempts to break through the decreasing resistance line (indicated by red symbols), the price eventually broke above the trend line in November 2023.
This breakout led to a rise until December, stopping just below a significant horizontal resistance area. The price climbed to the highest level of 2023 at $0.108. Since then, Dogecoin has been experiencing a downward price movement.
A weekly RSI analysis shows the value is still above 50, but it reached this point by decreasing, not increasing. The drop over the last two weeks from the 70 level indicates a weakening in price.
The situation suggests that there has been a change in momentum following the recent highest level, which requires traders to be more cautious about their investments.
DOGE Price Prediction
It is difficult to determine a clear direction in the weekly timeframe, similar to the daily trend, due to daily price movements and RSI.
Looking at the price movement, DOGE has been moving within a decreasing parallel channel since December 11. Such movements generally bring corrections.
Yesterday’s sudden price drop caused a move below the channel’s support trend line, but DOGE showed buying pressure with a long lower wick (green symbol). The wick confirmed the horizontal support level at $0.075. Following this price action, DOGE returned to the boundaries of the past channel.
Despite the strong price stance, a downward trend is observed in the daily RSI. For the first time since October, the RSI has fallen below 50 (red circle). Therefore, it is uncertain what kind of price movement DOGE may experience.
A new breakout in the channel could lead to a further decline and trigger a 9% drop to revisit the $0.075 support level. On the other hand, an upward breakout in the channel could bring a 25% rise to the next resistance level of $0.100.
