The price of Dogecoin is now being held back by the continuous resistance of May’s declining trend line, which is currently at $0.229.
The meme token has reached a new level of support with a low of $0.195 on May 19.
If weakness worsens, the DOGE 200-day simple moving average (SMA) around $0.171 provides additional support.
The price of Dogecoin rebounded from the 200-day SMA on June 22, indicating that significant investors were interested. Nonetheless, the rally stalled at May’s declining trend line, which has been a formidable barrier to any daily price strength. As a result, DOGE has steadily declined, putting the May 19 low on the table and forcing the digital asset to make a decision in the next five days.
Since the rally high of $0.291 on June 25, there has been a full evacuation of trading volume, indicating a lack of interest in Dogecoin price at current levels, and reinforced by an altcoin market battling to overcome unfavorable price structures.
The dominance of May’s falling trend line, which began on May 8 and persisted until the early-June high, is critical to the Dogecoin price forecast or narrative. The relationship with DOGE during the last 11 trading sessions exemplifies the notable resistance. Over the last 11 trading sessions, the digital asset has attempted seven unsuccessful rallies above the trend line.
DOGE is being cornered into a narrower gap (illustrated in green) that should resolve over the following five days as a result of the Dogecoin price action highlighted by the trend line resistance and emerging support established by the May 19 low. The storyline will be determined by how the cryptocurrency settles the mini-triangle.
A daily close below the May 19 low of $0.195 would trigger a drop to the 200-day SMA’s compelling support of $0.171, maybe to the Anchored VWAP from January 28 at $0.155, or even a sweep of the June 22 low of $0.152.
The April 23 hammer candlestick low of $0.135, which represents a 40% drop from the current Dogecoin price, is also a strong support level.
Graph of the DOGE/USD pair on a daily basis
DOGE speculators might expect higher results if Dogecoin pricing eventually closes over May’s falling trend line, which is now at $0.230. The May 23 low of $0.246, followed by the dropping 50-day SMA at $0.330, forms the initial layer of resistance. A successful resolution of the resistance at the 50-day SMA suggests that the rally will continue to the June 2 high of $0.463, representing a 105 percent gain from the trend line’s current position.
Although the descending trend line is posing a threat to Dogecoin’s price, the emergence of the May 19 low as support has forced DOGE into a corner (highlighted in green) that should be resolved shortly. It’s difficult to predict the altcoin’s final path at this stage, but investors should wait for it to show itself by hitting one of the price milestones outlined above.
FXStreet’s analysts assess where DOGE might be headed next./n
