On June 26, the Dogecoin price reached a low of 24 satoshis. Shortly after it made an attempt at initiating an upward move, reaching a high of 44 satoshis on July 5. However, it immediately decreased and has been trading around 24 satoshis since the beginning of August.
Will volatility return to the DOGE price or will it continue with its gradual decrease? Keep reading below if you want to find out.
For those of you that would be more interested in a video analysis, please click below:
For our previous analysis, click here.
Dogecoin Price: Trends and Highlights for September 17
- DOGE/BTC is trading below its weekly moving averages.
- There is support at 23 and 16 satoshis.
- DOGE is trading inside a descending wedge.
- A bullish divergence has developed in the RSI & MACD.
- There is resistance at 35 satoshis.
A look at the weekly time-frame shows that DOGE has been decreasing since the beginning of April.
The decrease has had a magnitude of 73 percent.
Additionally, we can see two support areas, at 23 and 16 satoshis respectively.
At the time of writing, the Dogecoin price was trading inside the first support area.
A look at the weekly moving averages (MA) shows that the price has been in a downtrend for a long period of time.
It is trading below both the 10- and 20-week MAs, facing very close resistance from the former.
Additionally, the failed upward move in June ended as soon as the price reached the 20-day MA.
This fact reiterates the strong resistance provided by the moving averages.
Will DOGE be successful in initiating a reversal or will it decrease towards the second support area?
Looking at the daily chart we can see that BTC has been trading inside a descending wedge since June 1.
The Dogecoin price is approaching the end of the wedge, which is projected to be at the beginning of October.
The descending wedge is considered a bullish pattern, making a price breakout more likely.
When we include the RSI and the MACD into the analysis we can see that DOGE has been showing clear signs of reversal. Both of them have been generating bullish divergence for the entire duration of the wedge.
Divergence in the 3-day time-frame is uncommon.
Combining this with the fact that it is occurring inside a bullish pattern makes us believe that a breakout is likely.
If a breakout occurs, an outline of possible future price movement is given below.
Additionally, one resistance area is traced.
Since the DOGE price is in a support area, it is likely to break out and reach the resistance area at 35 satoshis.
However, it is possible that it first decreases towards the second support area before initiating an upward movement.
However, due to the very significant bullish divergence, we believe this to be unlikely.
Dogecoin Price Summary
The DOGE price is trading inside a descending wedge.
According to our analysis, it is likely to break out and reach the resistance area outlined above.
For hypothetical trading purposes, DOGE may be a buy near the current price of 24 satoshis.
Do you think DOGE will break out from the wedge? Let us know in the comments below.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images are courtesy of Shutterstock, TradingView.