Expect buying to persist as long as $0.0730 holds
- Dogecoin price sees the 200-day SMA coming in as firm support.
- DOGE bears are prevented from making further lows after a volatile week.
- Expect to see pressure building as DOGE is trading near a possible breakout.
Dogecoin (DOGE) price is trading at a crucial point this morning as a breakout trade could be at hand with price action brushing against the red descending trend line that has been acting as a guideline to the downside. With the Relative Strength Index (RSI) nearly being oversold, the timing looks right to start buying. Be aware of some small dips and bumps before the breakout finally materialises towards $0.0944.
Dogecoin price is up by 27% as the distribution zone appears
Dogecoin price looks to be in a distribution zone at the moment, with the cap at $0.0800 and the floor near the 200-day Simple Moving Average (SMA) at $0.0730. With these two levels, a distribution zone is identified where buyers can gear up and buy into the price action before a breakout occurs as price action is squeezed against that red descending trend line from December. Once that breakout is confirmed, price action could quickly ramp up.
DOGE is thus finally delivering some bullish signals as the end of the year is upon us. It fits with the timing as the end of the year is often marked by low liquidity, and price action often rallies by New Year as buyers try to preposition for 2023. Expect, once price action drives higher, to see $0.0848 as a small roadblock before hitting $0.0944 by New Years’s eve.
DOGE/USD daily chart
Any downside risk simply comes from the 200-day SMA being broken to the downside. Follow through after such a break, however, would be limited, with the Relative Strength Index (RSI) already near the oversold barrier. So any dips would easily bounce off $0.0653, which comes from the monthly S1 support level.