The Dogecoin (DOGE) price is trading close to the resistance line of a descending parallel channel. A breakout from it could trigger a sharp increase.
DOGE is an internet meme coin created by Billy Marcus and Jackson Palmer. Twitter CEO Elon Musk has tweeted numerous times that DOGE is his favorite cryptocurrency. While he alluded that Twitter will eventually accept Dogecoin as payment, there has been no confirmation that this will occur.
The DOGE price had fallen under a descending resistance line since May 2021. The decrease led to a low of $0.049 in June 2022. Since then, the price has been moving upward.
During the week of Oct 24-31, 2022 (green icon), the price broke out from both the descending resistance line and the $0.076 resistance area. This led to a high of $0.158 the next week, a value that still stands.
However, the price action since the breakout has been anything but bullish. The DOGE price has struggled between the $0.125 – $0.076 range, trading close to the latter.
Moreover, the weekly RSI is just below 50, a sign of a bearish trend.
As a result, the weekly time frame is insufficient to predict the future trend’s direction.
The technical analysis from the daily time frame leans bullish for three reasons. Firstly, the price bounced at a long-term ascending support line (dotted) on March 10 (green icon). The increase took the DOGE price to the resistance line of a descending parallel channel (red icon), where it was rejected over the past 24 hours. Such channels usually contain corrective movements.
Finally, the daily RSI has moved above 50, a sign of a bullish trend.
As a result, the daily time frame indicates that the DOGE price is expected to break out from the parallel channel and increase toward $0.125.
To conclude, the most likely future Dogecoin price forecast is an increase toward the top of the range at $0.125. A breakout from the short-term parallel channel would confirm this. However, if the DOGE price closes below the $0.076 support, it would invalidate this bullish forecast and could signal a drop to $0.055.
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