Dogecoin (DOGE) Reaches Yearly High at $0.106: Analysis and Future Predictions
The recent surge in Dogecoin (DOGE) has led to the cryptocurrency reaching its yearly high at $0.106. While the price has slightly retraced since then, the overall bullish trend remains intact. This analysis delves into whether we can expect the DOGE rally to continue in the coming days.
Long-Term Resistance Approaching: On the weekly timeframe, it’s observed that in October, the price of DOGE broke a descending resistance line that had been in place for over 900 days. Since reaching its all-time high, DOGE has made three unsuccessful attempts to break this line, as marked by red icons on the chart.
On Wednesday, DOGE achieved a yearly high at $0.106, near a crucial horizontal resistance area. Notably, Dogecoin marked this milestone on its 10th anniversary.
Technical Indicators:
- The Relative Strength Index (RSI) is above the neutral level of 50 and rising, indicating a positive trend. The RSI has approached the 70 mark, almost entering the overbought territory. Similar RSI behavior in 2020 preceded a price increase to an all-time high.
Daily Chart and Resistance Levels: On the daily chart, despite reaching a new yearly high, the price on Wednesday formed a very long upper wick, a sign of selling pressure. Such wicks are considered indications of resistance from sellers.
Additionally, DOGE is trading within the resistance area at $0.095, present since the beginning of the year. A crypto trader (@Efloud) mentioned exiting positions as the price reached resistance. He also warned that a loss of the $0.085 level could trigger a compression.
Despite the bearish price action, the daily RSI is giving bullish signals. The indicator broke the bearish divergence line and is moving upward.
Future Predictions: With mixed signals, the direction of DOGE’s movement will depend on whether the price breaks above this resistance area. A successful attempt could lead to a 50% increase to the next resistance at $0.145. Conversely, failure may result in a 25% drop to the nearest support at $0.070. Traders are advised to monitor these key levels for potential trend changes.