Dogecoin suffered a steep drop on June 21, printing a large red candle that erased any hope of reversing a period of underperformance. However, the DOGE price has since recovered from the harsh decline, a confirmation of accelerating interest from the bulls.
Dogecoin price has traded within a topside declining trend line level since June 2. This resistance trend line has trapped Dogecoin in a bearish outlook, as the meme-based coin continued to record lower highs and lower lows on the daily chart.
While Dogecoin's price suffered from consistent selling pressure since early June, the steep fall was ignited when DOGE's price failed to sustain trading above the 100-day Simple Moving Average, which has acted as support since November.
Breaking below this crucial line of defense led to a 42% decline on June 21, tagging the lower barrier level of the demand zone at $0.162.
Now, Dogecoin's price appears to be in recovery, printing its fourth consecutive green candle on the daily chart, likely fueled by positive sentiment as Dogecoin developers introduce a new upgrade for the network.
DOGE price has managed to surge above the declining resistance trend line that has trapped the meme coin for almost a month, as well as above the 38.2% Fibonacci extension level at a price of $0.271.
Investors should also note that Dogecoin's price has also rallied above the 100-day SMA, however, only a daily close above this level would confirm further fuel to the upside. The Momentum Reversal Indicator also printed a buy signal on the June 24 candle, adding credence to the bullish thesis.
Dogecoin must continue to trade above the 100-day SMA and the diagonal trend line to raise the probability of DOGE price reaching the 50% Fibonacci extension level at $0.305. If this next target is reached and held onto as support, bigger aspirations toward the 50-day SMA should not be voided for the canine-themed coin.
If the Dogecoin price fails to close above the 100-day SMA and retreats from the prevailing uptrend, the DOGE price is likely to retest the 38.2% Fibonacci retracement level before falling toward the start of the demand barrier level at $0.229, coinciding with the 23.6% Fibonacci retracement level.
Should the Dogecoin price fail to hold the aforementioned critical support levels, the DOGE price would likely be trapped trading below the declining resistance level, consolidating until a compelling upside release emerges.
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