- 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.
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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