Dogecoin’s Rollercoaster Ride: Assessing Chances of Recovery After Yearly Highs
Despite a recent decline, Dogecoin (DOGE) is still trading above a critically significant support area, offering hope to the bulls.
Dogecoin Almost Makes It On the weekly chart, it’s evident that DOGE has been moving along a descending resistance line since achieving its historic high in May 2021. Multiple unsuccessful attempts to breach this line are noted (red markers), but in October 2023, DOGE finally succeeded.
Despite this breakthrough, the price has not yet reached the main horizontal resistance area.
Weekly DOGE/USD Chart. Source: TradingView The weekly Relative Strength Index (RSI) is on an upward trajectory and stands above 50, signaling positivity. Moreover, it has just entered the overbought territory (green marker).
Traders use the RSI to determine whether the market is overbought or oversold, helping them decide whether to accumulate or sell an asset. Bulls have an advantage when the RSI value is above 50 in an uptrend. If RSI is below 50 and declining, bears are in control.
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DOGE Price Forecast: Breakout or Pullback On the daily chart, Dogecoin has surpassed the horizontal resistance area at $0.095. This breakthrough propelled DOGE to reach a new yearly high at $0.107 (the previous yearly high was recorded on December 6 at $0.105).
Despite the swift ascent, DOGE formed a bearish candle by the end of the day (red marker). Currently, the token is trading near the $0.095 support.
The Relative Strength Index (RSI) on the daily chart does not provide clear signals. On one hand, it rebounded from the bearish divergence trendline (green line). On the other hand, it exited the overbought zone and is decreasing.
Daily DOGE/USDT Chart. Source: TradingView Considering these mixed signals, the future trend will depend on whether DOGE can solidify above $0.095 or fall below it. A successful rebound would set the stage for growth towards the next resistance at $0.145, representing a 50% increase from the current price. Otherwise, the price may decline by 25% to the nearest target at $0.072.
