Once a meme coin king, Dogecoin struggles with low trading volume and weak price performance, recently falling back to $0.08. The downturn in Bitcoin‘s value and persistent miner selling contribute to the loss of resistance levels. This week is crucial for Dogecoin, but why?
Dogecoin’s weekly chart readings indicate that the price has remained below the decreasing resistance line since October 2022. Although it hit a new low in June 2023, it has since recovered slightly due to a general market sentiment improvement. Dogecoin reached its annual peak at $0.107 on December 11 but has not returned to that level.
The weekly RSI has fallen back to the neutral zone while testing the price resistance trend line, but it has recovered somewhat. Miner sales continue, reinforcing resistance levels, as highlighted in our weekend on-chain analysis.
The absence of the Elon Musk factor also contributes to the community’s lack of enthusiasm, with a weekly outlook that is close to negative. The daily chart presents a clearer negative reading, with Dogecoin trading within a rising parallel channel since June 2023. Despite testing the resistance trend line twice, expectations for an upward move have weakened significantly due to a retreat within the channel at the start of 2024.
Factors such as ETF excitement drawing attention to Bitcoin and the Matrixport report shaking markets in early January have fed this negativity. Moreover, Elon Musk has repeatedly expressed his indifference towards cryptocurrencies. Despite these bearish predictions, popular crypto analyst WorldOfCharts suggests Dogecoin could see a notable rise this week, potentially breaking out and climbing to $0.50. A technical breakout this week could lead to a move towards the next resistance at $0.115, but a negative scenario could see a fall to $0.062.
