The Dogecoin (DOGE) price has broken out from a descending resistance line that had been in place since the beginning of Jan. DOGE should continue increasing towards $0.018 and possibly $0.021.
This is a short/medium-term analysis. For a longer-term analysis, click here.
Breakout and Retest
DOGE has been decreasing alongside a descending resistance line since Jan. 2, when it reached a high of $0.014. After three unsuccessful attempts, it finally broke out on Jan. 14.
However, DOGE has failed to increase significantly since the breakout, and is currently trading between support and resistance at $0.008 and $0.01, respectively.
The latter is the 0.5 Fib retracement level of the entire downward move and a horizontal resistance area, so a breakout above would confirm the bullish trend.
Technical indicators are bullish and support the possibility of a breakout.
The shorter-term two-hour chart further strengthens the possibility of a breakout.
DOGE has been following a short-term ascending support line since Jan. 11 and has flipped the $0.009 support level.
As long as DOGE is trading above these two levels, the short-term trend is bullish.
Doge’s Wave Count
Cryptocurrency trader @DlinkBull outlined a DOGE chart showing a parallel channel. They suggest an increase toward $0.03.
As seen in the first section, DOGE has already broken out from the resistance line of this channel.
DOGE seems to have begun a bullish impulse at the beginning of March (shown in white below), currently trading in wave 3.
The sub-wave count is given in orange, and DOGE is likely in the fifth and final sub-wave. A fall below the sub-wave 1 high at $0.0044 would invalidate this particular wave count.
Sub-wave 5 should end between $0.0181-$0.0184, a target found using an external retracement on sub-wave 4 and projecting the length of sub-waves 1-3 to the bottom of 4.
Afterwards, the entire impulse would likely complete at $0.021, the 4.61 Fib extension of wave 1.
To conclude, DOGE’s rate of increase should accelerate once it moves above $0.01, with a possible target of $0.018.
Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto.