Has Dogecoin Run out of Steam?
The price of the largest meme token in terms of market cap is trading inside a short-term neutral pattern. However, there are some long-term bullish signs as well.
Since June 2022, the price of Dogecoin has been increasing along an ascending support line. In November of the previous year, a descending resistance line was also formed by the price.
When these lines are combined, a symmetrical triangle is created and this is regarded as a neutral pattern.
The breakout
This year on April 3rd, there was a breakout in the DOGE price from the said triangle, as it climbed to a high of $0.105.
But, the next 24 hours saw it record a sharp drop and it was also rejected by the resistance level. In fact, the price once more ended up within the confines of the triangle on April 7th.
This suggested that the previous breakout recorded in the DOGE price had been illegitimate. But, the trend still appears to be bullish because the daily Relative Strength Index (RSI) is above the 50 mark.
Therefore, it is possible that there could be another breakout in the price. One of the potential reasons behind the rejection of the resistance level was due to Elon Musk’s move.
The Tesla CEO reverted the logo of Twitter back to its original blue bird, after having switched it to the DOGE mascot for a day.
Long-term outlook
The daily time frame’s technical analysis does not show a clear direction where the trend is concerned, but the analysis of the weekly time frame shows a bullish trend.
The primary reason behind this is the breakout from a descending resistance line of 539 days. There are usually significant increases in price when they breakout from such long-term structures.
Even though last week had seen DOGE record a long upper wick, the weekly RSI continues to be above the 50 mark.
Expectations
Therefore, it is expected that Dogecoin could attempt to reach the resistance area of $0.128. If there is a breakout, then there could be an increase in the DOGE price to $0.275.
But, if there is a continuous decrease in price, then Dogecoin could drop to the horizontal support area at $0.055.
To put it simply, an eventual breakout is expected in the price of Dogecoin from the short-term pattern and it is expected to rise towards the level of $0.128.