Dogecoin (Doge) price has been falling since reaching a new yearly high on December 11. The downtrend came to a halt with a strong recovery yesterday.
Doge price has been trading below the long-term horizontal resistance zone at $0.095 since December 2022. During this time, it has made several unsuccessful breakout attempts.
After a rapid uptrend that began in October 2023, Doge price finally broke above this zone on December 6, reaching a new yearly high on December 11.
However, the price failed to maintain the upward trend and fell below the resistance this week.
The daily RSI gives mixed results as although the indicator is falling, it remains above the 50 level.
Although the daily timeframe offers a negative outlook, the 6-hour chart suggests that the price could return to an uptrend.
The main reason for this comes from price action. Since December, Doge price has been trading inside a descending parallel channel, which often contains corrective movements.
This means an eventual breakout from it is the most likely scenario.
Yesterday, Doge started an uptrend after bouncing from the channel support line and the $0.087 horizontal support area.
The price is currently trading in the upper part of the channel and is approaching the resistance line, which coincides with long-term resistance at $0.095 from the daily timeframe.
If Doge breaks out, it could rally 12% and reach the next resistance at $0.105.
Despite this bullish prediction, a break below the $0.087 area and channel would mean a deeper correction. In that case, Doge price could drop 23% to the nearest support level at $0.072.
