The Dogecoin (DOGE) price has begun a relief rally as a result of the previous breakdown. It could retest the support line from which it broke down.
Since the beginning of the year, the Dogecoin price has risen in tandem with an ascending support line. The upward movement resulted in the year’s highest price of $0.099 on Feb. 5.
However, the price was unable to break above the $0.10 resistance level, resulting in a long upper wick. This is regarded as an indication of selling pressure. Afterward, the DOGE price broke down from an ascending support line.
Moreover, the daily RSI has decreased below 50 (red icon). This is a sign of a bearish trend and increases the validity of the breakdown.
Currently, the DOGE price is trading just above the 0.618 Fib retracement support level at $0.079. If it bounces, it could validate the support line as resistance.
However, if the price breaks down, DOGE could fall to the year’s lowest price at $0.066.
DOGE/USDT Daily Chart. Source: TradingView
There is no significant Dogecoin news that could influence the price. Despite Twitter CEO Elon Musk’s announcement of a plan to introduce payments on the platform, there is no word on whether the internet meme coin will be used in such payments.
Dogecoin Price Begins Correction
The short-term 12-hour chart technical analysis suggests that the DOGE price is correcting in an A-B-C structure. The breakdown occurred after the price completed a five-wave upward movement (black), where wave five took the form of an ending diagonal. The sub-wave count is shown in red.
If the count is correct, the DOGE price is currently in the B wave and will initiate a relief rally toward the ascending support line at $0.094. Afterward, another drop toward the 0.618 Fib retracement support level is likely.
However, if the DOGE price reclaims the ascending support line, it could immediately increase toward $0.114.
DOGE/USDT 12-Hour Chart. Source: TradingView
To conclude, the most likely Dogecoin price forecast suggests that the DOGE price will initiate a relief rally toward the ascending support line near $0.094 before completing its correction. A reclaim of the ascending support line would negate this bearish forecast and indicate that the correction is complete. In that case, the price could increase toward its Aug. high at $0.112.
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