Crypto Analysts Divided on Dogecoin’s Bullish Breakout from 900-Day Resistance

Crypto Analysts Divided on Dogecoin’s Bullish Breakout from 900-Day Resistance

Crypto News – The Dogecoin (DOGE) price recently broke above a long-term descending resistance trendline that had been in place since its all-time high. Interestingly, the breakdown of this trendline did not result in a significant price drop; instead, DOGE initiated an upward movement just four days later.

Dogecoin Breaks Free From 900-Day Resistance

An analysis of the weekly timeframe reveals that DOGE’s price had been held beneath a descending resistance trendline since its all-time high of $0.740 in May 2021. This downtrend led to a low of $0.049 in June 2022.

While there were previous attempts to breach this resistance, three unsuccessful tries (marked by red icons) created lower highs with long upper wicks.

However, the recent development saw DOGE’s price breaking free from this 900-day resistance. It concluded the week with a close at $0.069, marking the first weekly close above the trendline since the all-time high.

The weekly Relative Strength Index (RSI), used by market traders to gauge momentum and determine overbought or oversold conditions, currently stands at an undetermined level.

An RSI reading above 50, coupled with an upward trend, suggests that bulls are in control, while readings below 50 indicate the opposite. The RSI currently hovers around 50, signifying an uncertain trend.

What Are the Analysts Saying?

Cryptocurrency analysts have varying perspectives on Dogecoin’s future prospects.

ZAYKChart, for one, shares the same long-term descending resistance trendline and believes that DOGE is poised for a significant bullish surge.

Rovercvc goes even further to suggest that DOGE will outperform Bitcoin (BTC) due to the DOGE/BTC chart trading at substantial support levels.

However, rektcapital expresses some uncertainty regarding the bullish outlook. This skepticism arises from a less steep slope from which DOGE’s price has yet to break free.

DOGE Price Prediction: Is This the Beginning of a Reversal?

The daily timeframe’s technical analysis aligns with the bullish sentiment following DOGE’s breakout from the 900-day resistance trendline. On October 20, the price also managed to breach a shorter-term descending resistance trendline.

This not only catalyzed the ongoing uptrend but also led to a reclaim of the $0.060 horizontal support area, suggesting that the previous dip below it was merely a deviation.

Similar to the weekly timeframe, the daily RSI indicates a bullish trend. The indicator is on the rise and sits comfortably above the 50 mark, both of which are typically signs of a bullish trend.

It’s important to note, however, that DOGE price faced resistance at the 0.618 Fibonacci retracement level (marked in red) and has been on a downward trajectory since October 26.

The Fibonacci retracement principle suggests that after a substantial price movement in one direction, a partial retracement to a previous price level is expected before the original trend resumes. The 0.618 Fib level often determines whether the upward movement is a correction or a true reversal.

To confirm a bullish trend reversal, DOGE’s price needs to surpass this level, potentially leading to a 20% increase towards the July high of $0.083.

Despite this bullish DOGE price prediction, a close below the minor support at $0.066 could trigger a 13% decline towards the nearest support at $0.060.