Dogecoin (DOGE) has been showing bullish signs over the past five days, and its technical indicators suggest a possible move towards a descending resistance line.
Dogecoin (DOGE) price has been trading above the horizontal support zone located at $0.165 since the beginning of May. On January 5, DOGE appeared to pass below this area for the first time in 257 days.
That said, he returned to this area two days later and is currently in the process of validating it as support. Additionally, DOGE is still trading below a resistance line in place since August 2021.
Next move
Technical indicators are supporting an upward move to test the descending resistance line once again.
This is especially visible in the bullish divergences that have developed in both the MACD and the RSI (green lines). This is a bullish signal that often precedes price rallies.
For the upward movement to continue, it is crucial that the DOGE creates an upper bottom pattern.
The most plausible area for this figure lies between $0.15 and $0.166. This target range corresponds to the Fibonacci retracement support 0.618 – 0.786. The 0.786 zone also corresponds to a horizontal support zone, which makes it all the more important.
DOGE Wave Count
The technical analyst @ewforecast shared a chart of Dogecoin on Twitter, saying the price likely completed its corrective trading phrase.
While this may be true in the short term, the whole move since July looks like a broad corrective pattern.
This is mainly due to the constant superposition during the decline observed between August and December 2021 (in dark gray).
If this assumption is correct DOGE appears to be currently in Wave C of a corrective ABC structure.
If waves A:C exhibit a ratio of 1:1, this would lead to a high of $0.32 for the top of wave C.
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