Dogecoin (DOGE) closed last week positively, testing crucial levels that may dictate its next move. Currently, it trades above the 0.786 Fibonacci retracement level at $0.167, drawn from its all-time low of $0.0805 to a peak of $0.4844.
Dogecoin Reversal Confirmed?
A significant technical observation is its interaction with a long-term descending trendline from the May 2021 peak. DOGE recently retested this trendline as support after breaking above it in November 2024.
Last week’s candle formation resembled a Hammer, with a small real body and a long lower shadow. This suggests buyers absorbed selling pressure beneath the trendline, pushing the price back above the 0.786 Fibonacci level, indicating bullish momentum.
However, this week is crucial. A weekly close above $0.167 is needed to reinforce the bullish outlook. Otherwise, a retest of the multi-year trendline could dramatically impact DOGE’s price.
Momentum indicators are neutral to bearish; the weekly Relative Strength Index (RSI) sits at around 39, indicating weak buying power. The Exponential Moving Averages (EMAs) are offering resistance above the current price: the 100-week EMA is at $0.17284, and the 50-week EMA is at $0.21427. The 200-week EMA at around $0.13621 provides support if DOGE dips below the multi-year trendline.
Recent price action shows DOGE broke down from a bearish pattern, with buying interest emerging at the major support level near the Fibonacci level and trendline retest.
On-chain analyses from Santiment highlight that while Dogecoin has suffered during the broader market decline, there is a bullish divergence. An increase in wallets holding at least 1 million DOGE and active addresses reaching a 4-month high signals potential recovery.
Analyst Daan Crypto Trades noted that DOGE may have reclaimed vital levels, suggesting it could offer short-term relief while following a typical bullish reversal pattern in crypto.
Featured image created with DALL.E, chart from TradingView.com
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