Dogecoin Resumes a Downward Correction, Declines from a False Breakout

Dogecoin (DOGE) is trying to move back up after a disappointing price rally. Dogecoin rallied above $0.16 support after the December 4 plunge.

A rebound above support catapulted the altcoin to a high of $0.22. If the December 14 rally had cleared resistance at $0.25, DOGE would have emerged from a downward correction. 

The bullish momentum will continue above the previous high of $0.30. Today, DOGE/USD fell to the previous low and resumed its upward movement. After the unsatisfactory rally, the candlestick formed a long wick. The long wick indicates that Dogecoin is under heavy selling pressure at higher price levels. DOGE/USD is trading at $0.17 as of press time.

Dogecoin indicator reading

The 21-day moving average line is acting as resistance for the price of DOGE. The recent rally has taken DOGE to the 40 level on the Relative Strength Index for period 14. The altcoin is still in the downtrend zone and tends to move downwards. The cryptocurrency value is above the 40% area of the daily stochastic. The market is in a bullish momentum.

Technical indicators:  

Major Resistance Levels - $0.80 and $0.85

Major Support Levels - $0.45 and $0.40

What is the next direction for Dogecoin?

Dogecoin has pulled back from the downtrend seen on December 14. Buyers were unable to keep DOGE above the $0.22 resistance level. Meanwhile, the December 15 downtrend has yielded a candlestick that tested the 78.6% Fibonacci retracement level. The retracement suggests that DOGE will fall to the Fibonacci extension level of 1.272 or $0.159. The price action shows that DOGE has fallen to a low of $0.162 and then resumed its upward trend.

Disclaimer. This analysis and forecast are the personal opinions of the author and are not a recommendation to buy or sell cryptocurrency and should not be viewed as an endorsement by Coin Idol. Readers should do their own research before investing funds.