Disclaimer: The findings of the following analysis are the sole opinions of the author and should not be taken as investment advice.
Dogecoin has looked bearish since the market sell-off on September 7. The emergence of a descending channel accurately charted DOGE’s trajectory as the alt revised the lows last seen in early August. The outlook narrowed further after the price fell below its daily 200-SMA (green) for the first time in nearly 2 months.
While the market was certainly devoid of bullish momentum, the shorter time frame noted a bullish build-up after some indicators tried to assert themselves above the bullish control areas.
If this trend continues in the coming days, a price hike can be expected. At the time of this writing, DOGE was trading at $ 0.241, a 1.4% increase in the last 24 hours.
Dogecoin 4-hour chart
The last eight days have seen DOGE slowly lose value within a descending channel. Lower market lows were observed at $ 0.233 and $ 0.228, while the lower highs were broken at $ 0.263 and $ 0.254. After recovering from the lower trend line, the price can be expected to form a new high above 50% of the Fibonacci retracement level.
From there, the market would be open to a northbound breakout. However, some conditions must first be met. To start with, DOGE should close above the 78.6% Fibonacci level on strong volumes. Second, some of the DOGE indicators need to progress further in the charts.
Failure to break down the 50% Fibonacci level would likely result in a continuation within the pattern. From there, a new low of $ 0.225 can be expected.
Even though DOGE has tested the upper trend line on a few occasions, the RSI has failed to decisively rise above 50. This should change over the next few days to maximize the chances of a northbound breakout.
Meanwhile, the MACD has been recovering from multi-month lows, but no clear uptrend emerged. Interestingly, the Awesome Oscillator formed three lower peaks below the midline, a setup that is generally followed by an increase in upward momentum.
DOGE had a long shot of jumping above its parallel channel in the next few days. Each of its indicators formed bullish divergences from DOGE’s price action. However, they need to go a little further before a clear result can be determined.
The best-case result would result in a return towards $ 0.283, which would be a 15% increase from the pattern’s upper trend line.
This is a machine translation of our English version.