Dogecoin (DOGE) price may soon break a long-term descending resistance line. Nonetheless, the short-term movement before the final breakout is still inconclusive.
DOGE price has been declining below a descending resistance line since reaching an all-time high of $0.739 in May 2021. The downside movement so far has been the June 2022 low of $0.049. Initially, it seemed that the breakdown occurred due to shortage. Below the horizontal support area of $0.056. However, the price bounced off and formed a long lower wick, validating the area as support (green circle).
So far, the line has been verified five times (red mark), increasing its validity. A breakout above this is likely to accelerate Dogecoin price movement due to the high number of touches and a longer stay in the line. It is worth noting that the resistance line appears only in logarithmic charts.
The weekly RSI reading supports the possibility of a breakout. The indicator is generating a Bullish Divergence (Green Line) since the beginning of June. The divergence trend line is still intact.
For these reasons, a DOGE price breakout is likely. If this happens, Dogecoin price could move higher towards the nearest resistance level of $0.16.
Dogecoin price $0.06 . consolidated on
Despite the bullish weekly time frame DOGE price prediction, technical analysis readings from the lower time frame are still unclear.
The daily time frame confirms the validity of the $0.06 area. With the exception of two divergences, the area has acted as a support since June 15. Currently, it is trading inside the DOGE price zone. Therefore, it is not clear whether the area is acting as support or resistance.
Additionally, the daily RSI is moving freely above and below the 50 line. This can be a sign of an uncertain trend and may align with price action.
Finally, the two-hour chart is showing that Dogecoin price is trading inside a symmetrical triangle. The symmetrical triangle is considered a neutral pattern, which fits in perfectly with inconclusive price action and technical indicator readings.
Consequently, whether DOGE price breaks out of or below the triangle will likely determine the direction of the short-term trend.
Long term trend is bullish while short term one is uncertain
To conclude, the long-term Dogecoin price prediction is bullish due to a bullish divergence in the weekly RSI and multiple attempts to break out of the long-term resistance line. As a result of these readings, a final breakout from the line is expected.
However, the direction of the short-term movement is still uncertain. A weekly price below $0.06 would invalidate the bullish hypothesis and indicate that fresh lower lows are expected instead.
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