Calm Before the Storm? Dogecoin (DOGE) Price Primed for Takeoff

2 mins
12 January 2023, 18:30 GMT+0000
Updated by Geraint Price
12 January 2023, 18:30 GMT+0000
In Brief
  • DOGE broke out from a descending resistance line .
  • It reclaimed the $0.074 support area.
  • DOGE has completed an A-B-C corrective structure.
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The Dogecoin (DOGE) price shows signs of a new upward movement by breaking out from a long-term diagonal and horizontal resistance level.

Dogecoin Reclaims Important Levels

The Dogecoin price had been decreasing below a descending resistance line since Nov. 1. The downward movement caused a breakdown from the $0.074 horizontal area on Dec. 28, leading to a low of $0.066 two days later. 

However, the breakdown was not legitimate, since the DOGE price managed to break out from the descending resistance line and reclaim the $0.074 area on Jan. 10, validating it as support (green icons).

The reclaim was crucial since such deviations are usually followed by sharp upward movements. Moreover, the $0.074 area is very important since it had previously acted as support since the beginning of Nov.

If the upward movement continues, the closest resistance area is at $0.108. 

The daily RSI supports the continuation of the upward movement. The increase was preceded by bullish divergence in the RSI (green line). Furthermore, the indicator has broken out from a descending resistance line and moved above 50. These are both considered signs of a bullish trend. 

Therefore, the DOGE price trend is considered bullish as long as it does not reach a daily close below the $0.074 support area. 

Dogecoin (DOGE) Price Movement
DOGE/USDT Daily Chart. Source: TradingView

Dogecoin Long-Term Price Prediction for Jan

The Dogecoin long-term price prediction is bullish, both because of the bullish price action and the wave count. The wave count suggests that the Dogecoin price completed an A-B-C corrective structure (black) since Nov. 1. The sub-wave count is given in red, supporting the possibility that the second decrease is part of wave C. 

If correct, the Dogecoin price has now begun a new upward movement. While it is not certain if the increase is part of an -B-C structure or a new bullish impulse, both would indicate that a significant increase will follow, which will take DOGE at least to the $0.108 resistance. 

A decrease below the Dec. 31 minimum price (red line) of $0.065 will invalidate this count.

Dogecoin (DOGE) Wave Count
DOGE/USDT Six-Hour Chart. Source: TradingView

To conclude, it is possible that the Dogecoin price has begun a new upward movement that will take it back above $0.10. The trend is considered bullish as long as the price does not fall below $0.065.

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