Dogecoin (DOGE) experienced a sharp decline influenced by Bitcoin‘s recent drop, continuing its downward trend since December 2023. Despite the fall, DOGE still moves within short-term formation boundaries, raising questions about its potential to bounce back or face further declines after a potential breakout.
Since April 2021, DOGE’s price followed a decreasing resistance trend line, hitting a low of $0.049 in June 2022, disappointing investors. After several failed attempts to break this trend line, the price finally surged above it in November 2023.
This breakout led to a rise until December, stopping just below a significant horizontal resistance zone. The price reached its peak for 2023 at $0.108, but has been on a downward trajectory since then.
The weekly Relative Strength Index (RSI) remains above 50, but it reached this point by declining, indicating a weakening in price. The change in momentum after reaching the recent high level suggests that traders should be cautious with their investments.
DOGE’s price has been moving within a decreasing parallel channel since December 11, often indicating corrections. A recent sharp price drop tested the channel’s support trend line, but DOGE quickly rebounded, reaffirming the $0.075 support level. The daily RSI shows a downtrend, making it difficult to predict DOGE’s price movements. A breakout from the channel could either lead to a 9% drop to retest the $0.075 support or a 25% rise towards the next resistance level at $0.100.
