The Dogecoin (DOGE) price broke out from a long-term descending resistance trendline but failed to sustain its increase.
Since the momentum reversal, the price has traded inside a bearish descending triangle pattern.
Dogecoin Fails to Sustain Increase
The daily timeframe outlook shows that the DOGE price broke out from a descending resistance trendline on September 27. Before the breakout, the line had been in place for 64 days.
Despite moving above the trendline, Dogecoin failed to initiate a significant upward movement. Rather, the price reached a high of $0.064 before falling.
On October 2, the DOGE price created a bearish engulfing candlestick (red icon). This is a type of bearish candlestick in which the entire gains from the previous period are negated in the next one. DOGE now trades slightly above the $0.060 horizontal area.
The weekly Relative Strength Index (RSI) is bearish.
The RSI is a momentum indicator used by traders to evaluate whether a market is overbought or oversold, and to determine whether to accumulate or sell an asset.
Readings above 50 and an upward trend suggest that bulls still have an advantage, while readings below 50 indicate the opposite.
The RSI was rejected by 50 (red circle) and is falling, both considered signs of a bearish Dogecoin price trend.
However, it is important to note that the ascending support trendline in the RSI is still intact. This trendline preceded the entire upward movement that began on August 17.
DOGE Price Prediction: Bearish Pattern Warns of Decrease
Unlike the daily timeframe, which is undetermined, the six-hour one provides a bearish outlook. There are two main reasons for this.
Firstly, the DOGE price is trading inside a descending triangle. The descending triangle is considered a bearish pattern, meaning that it leads to breakdowns most of the time. The rejection on October 2 (red icon) determines the slope of the resistance trendline.
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Secondly, the upward movement inside the triangle resembles a corrective, A-B-C pattern (black). Elliott Wave theory involves the analysis of recurring long-term price patterns and investor psychology to determine the direction of a trend.
The fact that the upward movement is corrective suggests that the trend is bearish.
If the meme coin breaks down from the triangle, it will likely fall by another 15% and reach the $0.052 region. The triangle’s height (white) projected to the breakdown point gives this target.
Despite this bearish DOGE price prediction, an increase above the triangle’s resistance trendline will mean that the trend is bullish instead. In that case, the price will likely increase by 8% and reach the $0.067 resistance.
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