Dogecoin (DOGE) Faces Test: Can It Hold and Bounce Back Stronger?
Key Takeaways:
Dogecoin price started a downside correction from the $0.4850 zone.
DOGE is following a key rising channel with support at $0.3920 on the daily chart.
The price could start another increase if it stays above the $0.3380 support.
Dogecoin is trading in a positive zone above $0.3380. DOGE price could decline heavily if it settles below the 50-day simple moving average.
Dogecoin Price Holds Key Uptrend Support
After a major surge like Bitcoin, Dogecoin faced hurdles near the $0.4850 zone. It failed to test the $0.50 resistance zone and started a downside correction. There were a couple of swing moves and the price settled below the $0.4400 level.
The recent low was formed at $0.3660 before DOGE recovered some losses. There was a move above the $0.380 level and the price remained well above the 50-day simple moving average.
Dogecoin price daily chart | Source: DOGE/USD on TradingView.com
Dogecoin is now trading above the $0.40 support. It is also following a key rising channel with support at $0.3920 on the daily chart. However, it seems like the bulls are losing their grip.
If there is another increase, the price could face resistance near the 50% Fib retracement level of the downward move from the $0.4845 swing high to the $0.3660 low. The first major resistance is near the $0.4350 level. A clear move above the $0.4350 resistance could send the price toward the $0.450.
The next key resistance sits near the $0.4550 zone. It coincides with the 76.4% Fib retracement level of the downward move from the $0.4845 swing high to the $0.3660 low, above which the price could accelerate higher toward $0.4850. Any more gains might send DOGE price toward the $0.50 level in the coming days.
Major Pullback In DOGE?
Conversely, Dogecoin might fail to surpass the $0.4350 resistance. In the stated case, the price could continue to move down. Immediate support on the downside is near the $0.3880 level or the channel’s trend line.
The first major support is near the $0.3380 level or the 50-day simple moving average, below which the price might drop and test $0.3050.
The next major support sits at the $0.2550 level. If the bulls fail to defend the $0.2550 support, the price might drop toward $0.2200 or even $0.200 in the medium term.
Overall, DOGE is holding gains above $0.380. To continue higher, DOGE must surpass the $0.4350 and $0.4550 resistance levels in the near term.
