Dogecoin (DOGE) Price Bounces From Long-Term Support, Must Break $0.20 Resistance to Confirm Bullish Trend

Dogecoin’s price bounced in April, preventing a breakdown from a long-term diagonal support level.

Key Takeaways

Dogecoin’s price bounced in April, preventing a breakdown from a long-term diagonal support level.

However, while Dogecoin’s chart against Bitcoin (BTC) price looks bullish, the one against USD is still unclear.

The DOGE price must exceed the $0.20 resistance to confirm its bullish trend reversal.

Let’s analyze the price action and see if this breakout will happen.

Dogecoin Price Bounces

The long-term Dogecoin analysis shows that the price has increased alongside an ascending support trend line since the start of 2024.

DOGE has bounced at the trend line several times, most recently in April (green icon), creating a bullish candlestick.

While the increase has been substantial, the Dogecoin price has yet to break out from its resistance trend line, which has existed since the start of the year.

The DOGE price has to break out above this resistance to confirm that it has ended its correction.

Despite the bounce, technical indicators are not yet bullish.

While the Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are increasing, they are still in bearish territory.

The RSI is below 50 while the MACD is negative, both indicative of a bearish trend.

As a result, the weekly time frame does not confirm if the DOGE trend is bullish or bearish.

What’s Next for DOGE?

The wave count shows that DOGE has completed a five-wave downward movement (red) since the December cycle high.

If the count is accurate, Dogecoin’s price has started an A-B-C corrective structure that will take it toward the next resistance at $0.27.

However, before it reaches it, DOGE must clear the $0.20 horizontal resistance area, which could act as the local top for wave A.

Nevertheless, technical indicators are decisively bullish. The RSI and MACD both generated bullish divergences (orange).

The divergences reinforced a bullish double-bottom pattern for Dogecoin.

So, Dogecoin’s price will likely breakout above $0.20 and reach the $0.27 resistance.

The short-term outlook supports this since Dogecoin’s price trades inside an ascending parallel channel, often containing corrective structures.

Dogecoin’s channel contains wave A in this structure, and its breakdown will confirm that wave B has started.

Based on the price action, it is still unclear if the price of DOGE will create another short-term higher high or not.

In any case, an eventual breakdown below the channel is likely.

Correction Before Rally

The DOGE price has shown immense strength by bouncing in April, preventing a breakdown from long-term support.

However, the memecoin has not yet confirmed its bullish trend reversal since it has yet to breakout from its main resistance area.

The wave count suggests a breakout will occur, but an initial drop is likely beforehand.