Dogecoin (DOGE) Sees Price Breakdown on October 9: What’s Next as of October 10?

Dogecoin (DOGE) Sees Price Breakdown on October 9: What’s Next as of October 10?

Crypto News – On October 9th, the price of Dogecoin (DOGE) experienced a significant breakdown from its 120-day horizontal support area. However, the cryptocurrency continues to trade within a more extended horizontal support level.

Breaking Down the 120-Day Support Area: Analyzing the daily timeframe, it’s evident that DOGE’s price had remained above the $0.060 horizontal support area since June 10th. Additionally, DOGE fell below a descending resistance trendline starting from July 25th, forming a descending triangle—a bearish pattern.

The volatility of Dogecoin surged on October 9th, resulting in a breakdown from the support area, leading to a low of $0.057. This marked the lowest price since August 17th, when the altcoin dropped to $0.055.

Although there was a slight bounce in DOGE’s price the following day, creating a long lower wick, it had not yet reached the $0.060 area.

Assessing the Relative Strength Index (RSI): The daily Relative Strength Index (RSI), a momentum indicator helping traders determine market conditions, is currently bearish. The RSI stands below 50 and is decreasing—indicating a bearish trend. Furthermore, the indicator broke down from its bullish divergence trendline (green line).

Predicting DOGE’s Price Movement After the Breakdown: Switching to the weekly timeframe, a bearish outlook is observed for DOGE. This is primarily due to the cryptocurrency trading within a larger descending triangle pattern with a base at $0.057, confirming the bearish sentiment.

In the event of a breakdown encompassing the entire triangle’s height (black line), DOGE could potentially drop to $0.020, indicating a 67% decrease from the current price. The 1.27 Fib extension (white) aligns with this area, supporting it as a local bottom.

Utilizing Fibonacci retracement levels, after a significant price shift in one direction, a partial return to a previous price level is expected before the continuation of the trend. This theory can guide in identifying future downward movement bottoms.

Similar to the daily timeframe, the weekly RSI remains bearish, below the 50 mark and in decline.

Despite this bearish prediction for DOGE’s price, a robust bounce at the long-term horizontal support area of $0.057 could result in a 20% increase towards the long-term descending resistance trendline, presently at $0.070.