The price of Dogecoin (DOGE) recently broke free from a long-lasting descending resistance trendline but is now caught in a short-term bearish pattern. Following the shift in momentum, DOGE price has been moving within a bearish descending triangle formation.
Dogecoin Struggles to Sustain Its Rise
Looking at the daily timeframe, DOGE broke free from a descending resistance trendline on September 27, which had held for 64 days.
However, DOGE didn’t kickstart a significant upward movement despite this breakout. Instead, its price briefly reached a high of $0.064 before declining.
Things took a bearish turn on October 2 when DOGE formed a bearish engulfing candlestick (indicated by a red icon). This pattern signifies that all the gains from the previous period were wiped out in the next one. Currently, DOGE is trading just above the $0.060 support level.
Is the Weekly Relative Strength Index (RSI) Bearish?
Traders use the RSI as a momentum indicator to assess market conditions, determine if assets are overbought or oversold, and decide when to buy or sell.
In the case of DOGE, the RSI recently encountered resistance at the 50 level (indicated by a red circle) and is now declining, showing a potential bearish trend.
Nevertheless, it’s essential to note that the ascending support trendline within the RSI remains unbroken. This trendline preceded the entire upward movement that commenced on August 17.
Read Also: Is DOGE on the Verge of a Bearish Breakout as it Consolidates Near its Range Low?
DOGE Price Prediction: Bearish Signals Point to Potential Decline
In the six-hour timeframe, there are indications of a bearish outlook for DOGE, driven by two key factors.
Firstly, the DOGE price currently resides within the confines of a descending triangle pattern. Descending triangles typically accompany bearish trends and frequently result in price breakdowns. The rejection on October 2 (indicated by the red icon) defines the resistance trendline’s downward slope.
Secondly, the upward movement within this triangle pattern resembles a corrective A-B-C pattern (highlighted in black). Elliott Wave theory suggests a bearish trend due to this corrective nature.
Should the meme coin break below the triangle’s lower boundary, there is a likelihood of a further 15% decline, potentially reaching the $0.052 level. Projecting the triangle’s height (shown in white) to the point of breakdown determines this target.
While the DOGE price currently suggests a bearish outlook, breaking above the triangle’s resistance trendline could indicate a bullish trend, potentially leading to an 8% increase toward the $0.067 resistance level.
Read Also: Dogecoin Projected to Soar to 30 Cents: Discover the Anticipated Timeline
