Long-Term Dogecoin Channel Shows How Far Away the Bottom Is
Dogecoin (DOGE) has been in a downtrend for the last 13 months, with the price action trading inside a descending channel. In this article, we used the weekly log chart to zoom out and see how far away the bottom of this bearish cycle could be from here.
When zooming out, the long-term descending channel encapsulating the price action starting from the May 2021 peak is more visible. In the short term, we broke and closed below the middle of the channel, which now exposes the lower channel support.
The bottom of the channel stands at $0.036, which is near the bottom of the previous consolidation that led to the last leg higher in DOGE price. Therefore, this area is a significant price zone where DOGE can bottom.
Currently, the $0.05 support held, and the price bounced, but as long as we remain below the middle of the descending channel, the sentiment remains bearish.
The stochastic oscillator is also the most oversold it has ever been, and it already had a crossover to the upside. This development might slow down the current selling pressure, but ultimately we’re still drawn to the bottom of the channel.
What is a Stochastic Oscillator?
The Stochastic Oscillator is a momentum indicator that shows the location of the closing price of a crypto in relation to the high and low range of the price of a crypto over a period of time, typically a 14-day period. It is plotted on a scale from 0 to 100.
Looking forward: Any subsequent rally can face possible resistance near the $0.063 - $0.07 price zone, which is the middle of the channel.
Read more about Dogecoin and other meme coins in our latest blog.
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