Positive Dogecoin News Leads to DOGE Price Breakout

Dogecoin is Not Migrating to PoS

The Dogecoin (DOGE) price has broken out from a short-term bullish pattern. It is currently attempting to reclaim the $0.074 resistance area. The upward movement was preceded by positive Dogecoin news.

DOGE is the largest internet meme coin based on its market cap. For a long time, there was no Dogecoin news about the platform’s development, and the only notable news were tweets from Elon Musk that mentioned the coin in one way or another.

However, on Dec. 31, The Dogecoin Foundation announced the Dogecoin CoreFund. The foundation stated that it would allocate five million DOGE to improve Dogecoin Core, the official wallet maintained by the foundation. The wallet is critical for the Dogecoin community and ecosystem. The DOGE price has responded positively to the news, increasing by more than 6% since the announcement.

Dogecoin Price Breaks Out

The Dogecoin price had traded inside a descending wedge since Nov. 9. The wedge is considered a bullish pattern, meaning that it leads to breakouts most of the time. 

On Dec. 30 and 31, the DOGE price seemed to break down from the wedge (red circle). However, this was a failed breakdown, since the price reclaimed the support line during the next 24 hours and then broke out from the descending wedge. It is possible that the aforementioned positive Dogecoin news aided the increase.

Moreover, the breakout was preceded by a bullish divergence in the six-hour RSI (green line), which often precedes upward movements. 

If the increase continues, the closest resistance area would be between $0.089-$0.084, created by the 0.5-0.618 Fib retracement resistance levels.

DOGE/USDT Six-Hour Chart. Source:TradingView

Dogecoin Is Not out of the Woods Yet

Despite the seemingly bullish outlook from the short-term six-hour time frame, the daily one is less bullish. The main reason for hits is that the price is still trading below the $0.074 horizontal resistance area. This is a crucial area since it previously acted as support since the beginning of Nov. 

However, despite the failure to reclaim this area, the daily RSI has generated a significant amount of bullish divergence. Such divergences often precede upward movements. Moreover, the indicator has broken out from a descending resistance line (black), supporting the possibility that the price will do the same. 

If a rejection occurs, the long-term ascending support line is at $0.06 and could provide a bounce if the DOGE price reaches it once more.

Dogecoin Daily Movement
DOGE/USDT Daily Chart. Source: TradingView

To conclude, while there are bullish Dogecoin price signals in both the daily and six-hour time frames, the price action is not bullish yet due to the failure to reclaim the $0.074 resistance area. Until this occurs, the long-term trend cannot be considered bullish.

For BeInCrypto’s latest crypto market analysis, click here.

Disclaimer

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