Dogecoin price action hints DOGE can reverse its bearish trend
|- Dogecoin price has dropped nearly 4% in the last 24 hours after facing rejection due to a declining trend line.
- This pullback could bounce off the $0.0705 support level and kick-start a minor upswing to $0.07399, which could extend up to $0.08287.
- A decisive flip of the $0.0705 support barrier into a resistance level will invalidate the bullish thesis.
Dogecoin (DOGE) price presents a potential for trend reversal provided a certain set of conditions are met. These conditions involve overcoming key hurdles for DOGE bulls and seeing momentum indicators flip bullish on lower time frames.
Also read: Dogecoin price grows a shield against this cohort, even as selling from it hits a historic high
Dogecoin price lacks initiation
Dogecoin price is close to retesting the lower limit of the $0.07053 to $0.09520 range for the fourth time in the last month. Connecting the swing highs formed over the last month using a trend line shows a declining resistance level as seen in the chart below.
A reversal in trend seems likely, but there are a few conditions that need to be achieved:
- The Awesome Oscillator (AO) has been receding below the zero line, suggesting a rise in bullish momentum. A decisive flip above the zero line would confirm that buyers are attempting a rally.
- The Relative Strength Index (RSI) has spent roughly 41 days below the mean level and is attempting to flip it. A successful reclaim of the 50-level, along with AO, would confirm the start of an uptrend.
If the above two conditions are met, investors can expect Dogecoin price to breach the short-term target at $0.07399. While this recovery rally might be smaller in magnitude, an extension of the run-up will occur if DOGE bulls manage to overcome the $0.07483 hurdle.
In such a case, Dogecoin price could attempt a retest of the larger range’s midpoint at $0.08287.
DOGE/USDT 1-day chart
While the overall outlook for Dogecoin price seems bullish, a breakdown of the $0.07053 will create a lower low and invalidate the bullish thesis. In such a case, DOGE could slide 2% and revisit the $0.06856 swing low formed on May 25.
In a dire case, Dogecoin price could revisit the $0.05972 support floor.
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