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Dogecoin Price Stumbles at $0.16 but DOGE RSI and MACD Predict Bullish Trend

Last Updated May 24, 2024 10:47 AM
Valdrin Tahiri
Last Updated May 24, 2024 10:47 AM
By Valdrin Tahiri
Verified by Peter Henn

Key Takeaways

  • Dogecoin’s RSI and price both broke out from their resistance trend lines.
  • DOGE has performed worse than other memecoins such as PEPE and FLOKI.
  • After the MACD and RSI confirmed the bullish trend, can the price do the same?

Dogecoin’s price has rallied since May 1, recently breaking out from a resistance trend line. Even though the memecoin has underperformed relative to others such as FLOKI and PEPE, the future outlook remains positive.

The DOGE price has corrected since its yearly high on March 28, and a significant increase is needed to reach new highs. While DOGE took the first steps toward this increase, the rally remains unconfirmed.

Can Dogecoin Sustain Rally Above $0.16?

The daily time frame chart shows that DOGE broke out from a descending resistance trend line on May 15. While this is considered a sign that the correction is over, DOGE did not confirm this by sustaining its increase.

Rather, the price initially moved above the $0.16 resistance area before falling below it. In turn, this created a deviation (red circle), considered a sign of weakness.

Despite the lacking price action, the MACD and RSI both gives bullish readings. The indicators are trending upward, the MACD is above 0 and the RSI is above 50. So, they imply that DOGE will eventually be successful in moving above the $0.16 resistance area. If this happens, the next resistance will be at $0.20.

DOGE Price Movement
DOGE/USDT Daily Chart | Credit: TradingView

Failure to close above the $0.16 area will negate this bullish DOGE price prediction. In that case, the price could return to the $0.125 area, validating it as support once more.

Dogecoin’s RSI Precedes Increase

The DOGE price had fallen under a descending resistance trend line since the yearly high of $0.23 on March 28. The decline led to a low of $0.12 on May 1. DOGE bounced afterward, validating the $0.125 horizontal area as support. It has increased since.

While initially struggling with the descending resistance trend line, DOGE broke out on May 15 and validated it as support the next day. Though it has not started its upward movement yet, the Dogecoin price trades above its pre-breakout levels.

Dogecoin Price Daily Movement
DOGE/USDT Daily Chart | Credit: TradingView

Before the breakout, the daily RSI gave a positive signal. The indicator broke out from the bearish divergence trend line (green) that led to the downward movements. This is a sign that the correction is over.

Currently, the RSI attempts to move above 50 and the MACD is rising above 0. These two movements combined with a price breakout above $0.160 will confirm the bullish trend reversal has started.

Dogecoin Price Prediction: What Does the Wave Count Say?

Similar to the price action and indicator readings, the wave count points to a continued Dogecoin price increase. The most likely wave count suggests DOGE has started the fifth and final wave of its increase, which will take it to a new yearly high.

According to the count, DOGE completed a fourth wave pullback (green circle) in the beginning of May by bouncing at the previous channel’s resistance trend line. If the count is accurate, DOGE can increase all the way to $0.290.

Future Wave Count
DOGE/USD Weekly Chart | Credit: TradingView

The 1.61 external Fibonacci retracement gives this target. Also, the same target is found by giving wave five the same length as waves one and three combined.

Dogecoin’s Final Increase Has Started

Dogecoin’s  RSI indicator gave a bullish signal that preceded a notable price rally. While the MACD has not confirmed this rally yet, the wave count suggests the correction is over. A daily close above $0.16 will go a long way in confirming this possibility, while a close below $0.145 will put it in doubt, likely leading to a deeper retracement.

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