DOGE Challenges Key Support Level following Break of 763-Day Trendline
Dogecoin (DOGE) is currently facing a critical test at the $0.13 support level after breaking below a significant 763-day diagonal support trendline back in November. The popular meme coin is currently trading at $0.131, showing a 58% decrease in value compared to a year ago and a 20% decline over the past month. Despite the downward trend, technical analysts are noticing early signs of stabilization in the market.
In recent weeks, DOGE experienced a sharp selloff from $0.136 in early December, dropping below $0.124 temporarily before bouncing back. The cryptocurrency has been forming higher lows around the $0.126 mark, indicating that buyers are stepping in at earlier levels than before. Analysts are closely monitoring the $0.128-$0.130 range as a crucial area for the coin’s price action, with a potential breakout from this zone being essential for bullish momentum.
On the 4-hour chart, RSI divergence has been observed, with the indicator showing higher lows while the price continued to trend lower from above $0.140. This kind of disconnect in the indicators often occurs around trend reversal points after a prolonged period of downward pressure. Additionally, selling spikes have been decreasing in size and aggressiveness, hinting that distribution might be waning.
The breach of the 763-day support trendline in November raised concerns about the end of the bull cycle for Dogecoin. Both the RSI and MACD on the weekly chart are not showing bullish signals, decreasing the likelihood of a significant rebound in the near term. Technical analysts caution that a close below $0.130 could trigger a 25% decline to $0.095, while reclaiming the $0.128-$0.130 range could pave the way for a recovery towards $0.135 and potentially $0.140.
DOGE’s daily charts indicate that the coin is trading within a descending parallel channel, consistently setting new lows. Falling below the channel’s midline suggests a higher probability of further declines towards the support trendline at $0.105. Amidst ongoing market volatility, with Bitcoin hovering around $97,000, Dogecoin is also grappling with weakening momentum in the memecoin sector compared to its peak in late 2024.
Despite the prevailing market challenges, trading volume for Dogecoin remains relatively high at $1.99 billion over a 24-hour period, indicating sustained market participation despite price fluctuations. As the broader cryptocurrency market continues to face pressures, Dogecoin will need to navigate these headwinds and crucial support levels to determine its future price trajectory.
