Is a Rally in Sight for Dogecoin (DOGE) Amid Increasing Address Count?

The Dogecoin (DOGE) price has fallen gradually since its yearly high on December 11.

Despite the decrease, the Dogecoin price is above that at the start of December. Will the last week of the month be bullish?

Dogecoin Breaks Out from Long-Term Resistance

The DOGE price had traded under a long-term descending resistance trend line since April 2021. The decrease led to a low of $0.049 in June 2022. 

Afterward, the price bounced and made several unsuccessful breakout attempts (red icons) before finally moving above the trend line in November 2023. The DOGE price breakout led to a new yearly high of $0.108 in December, slightly below a critical horizontal resistance area.

The price has fallen in the weeks since, failing to sustain its yearly high. 

DOGE/USDT Weekly Chart. Source: TradingView

With the RSI as a momentum indicator, traders can determine whether a market is overbought or oversold and decide whether to accumulate or sell an asset. Bulls have an advantage if the RSI reading is above 50 and the trend is upward, but if the reading is below 50, the opposite is true.

The weekly RSI is above 50 but has decreased in the past two weeks. The decrease took it below 70, a sign of a weakening trend.

DOGE Price Prediction: Is Final December Rally in Store?

Similarly to the weekly time frame, the daily one does not offer decisive clues regarding the trend’s direction. However, the time frame is leaning bullish because of the price action.

Since the yearly high, DOGE has traded inside a descending parallel channel. Such channels usually contain corrective movements, meaning an eventual breakout from them is likely.

The price bounced at the channel’s support trend line and the $0.087 horizontal support area on December 18, creating a long lower wick (green icon). DOGE is currently attempting to break out from the channel.

Global Head of News at BeIn Crypto Ali Martinez tweeted that there is a steady rise in the creation of new DOGE addresses. This increase in network activity is a promising sign for DOGE.

However, the daily RSI is undetermined. The indicator is slightly above 50 but has fallen since early December.

Nevertheless, a breakout remains the most likely scenario due to the price action. If DOGE breaks out, it can increase by 11% to the next resistance at $0.105.

DOGE/USDT Daily Chart. Source: TradingView

Despite this bullish DOGE price prediction, failure to break out can trigger an 8% decrease to the closest support at $0.087.

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

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