This Is Dogecoin’s (DOGE) Only Chance for a Local Breakout

• Dogecoin’s bullish sequence
• Next key level

The chart shows that Dogecoin is running out of space. Since early October, the price has been steadily declining, with every attempt at a rally being thwarted by the descending trendline that currently serves as DOGE’s main barrier. However, the structure is becoming more rigid. The asset is building a base directly beneath a trendline that has rejected it for almost two months; sellers are losing steam and volatility is contracting.

Dogecoin’s bullish sequence

The only true window for a reversal on DOGE is this one. Even though the overall trend is still negative, the price is currently hovering around $0.14, clearly forming a sequence of higher lows within the micro-range. Instead of showing fresh strength, the RSI is stabilizing in the low 40s, indicating seller fatigue.

DOGE/USDT Chart by TradingView

The volume has significantly decreased, which is a classic indication of trend fatigue because strong downtrends seldom continue on declining volume. Although it does not ensure a reversal on its own, it does indicate that sellers are no longer in complete control.

The trendline that is descending is the true focal point. DOGE has tested it several times, and the downside follow-through decreases with each touch. This is usually the last phase prior to a breakout, when investors misinterpret the seeming stillness as weakness as pressure increases.

Next key level

The next crucial level will be the 50-day MA, which is located at $0.16, if DOGE broke above the trendline. Bulls have a clear advantage in momentum if they take that into account. The market will probably push DOGE back toward November lows if it is unable to break the declining trendline at this point, which is the worst-case scenario. Building will not go on forever.

However, the current setup indicates the opposite: the market is undervaluing the possibility of a breakout, which is far more likely than most people believe. Clean technical setups like this are rare for DOGE. This is the only real opportunity for bulls to seek a reversal, and the chart indicates that it is happening more quickly than most investors anticipate.

Source: https://u.today/this-is-dogecoins-doge-only-chance-for-a-local-breakout