Dogecoin price has entered a significant technical test following the breakout, as the price starts to retrace and approach a crucial level of support, which will dictate whether the cryptocurrency continues its bullish trend or corrects further.
At the time of writing, DOGE is trading at $0.08631, with a 24-hour trading volume of approximately $1.25 billion and a market capitalization of $13.45 billion. DOGE has declined 4.24% over the last 24 hours, putting renewed attention on nearby technical support levels.
Dogecoin Price Retests Key Kijun-sen Support
On August 26, crypto market analyst Trader Tardigrade noted the changes in the four-hour Ichimoku setup of Dogecoin. In accordance with the analysis, DOGE’s recent breakout attempt is currently being retraced as the asset has been retreating towards the $0.085 Kijun-sen.
The Kijun-sen is one of the elements of the Ichimoku Cloud indicator that is usually considered to be a possible support or resistance level. The fact that DOGE can stay above this level may mean that the recent retracement is a regular retest, not the beginning of a downtrend.
The chart also highlights the $0.083 level as another major support region. This level is part of the larger cloud formation and may gain more relevance in case of further selling pressure.
At the same time, the forward cloud formation is growing while preserving its bullish outlook. In case such conditions are preserved, it can also act as another technical support for DOGE in the coming sessions.
Nonetheless, a strong breakdown through the Kijun-sen and the prior area of breakout within four hours would invalidate the current pattern. This may result in further retracement action.
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DOGE Needs to Reclaim $0.096
To keep the bull pattern active, Dogecoin price should first hold the present support zone intact. Its subsequent resistance level should be somewhere around $0.096.
Breaking above this level would help to continue its path towards the earlier swing high around $0.10.
Therefore, the $0.085-$0.096 zone becomes critical for DOGE from a technical perspective for the time being. Holding the lower boundary would confirm that buying is still holding this recent breakout zone, whereas holding the upper boundary would provide an indication that the uptrend is alive.
Failure to hold the $0.083 level could bring a quick turnaround in the technical outlook of DOGE.
Dogecoin Price Has Higher Targets Ahead
Dogecoin price is currently sitting at $0.08662, above the midpoint of Bollinger Bands of $0.07673. The price can advance further as the upper Bollinger Band is at $0.09488, whereas the lower band is at $0.05858.
The RSI is at 65.43, indicating an uptrend, although it hasn’t touched the overbought level of 70 yet. The average of the RSI is at 62.22, backing the trend. With such a good indicator reading, DOGE may aim at the upper Bollinger Band of $0.0948
What Happens Next for Dogecoin?
This could be the case for the next couple of four-hour candles.
The first target that needs to be watched out for is the $0.085 level, which is currently the location of the Kijun-sen. For DOGE to trade above this range, it would then move higher to $0.096 and subsequently $0.10.
However, trading below $0.083 would undermine the bullish setup.
As things stand, the technical outlook is positive as long as Dogecoin price can hold above its key support zones. However, the 4.24% fall registered yesterday indicates that the market is yet to confirm the latest leg up.
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This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
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