Yerevan (CoinChapter.com) — Dogecoin (DOGE) is taking a break from its earlier bullish run, as major cryptocurrencies like Ethereum outweigh in the recent headlines.
Dogecoin price has earlier formed a descending triangle, which is an indicator of a possible bullish breakout. As of now, the DOGE/USD exchange rate has tested $0.22 level as support more than two times (solid black line on the chart below). Meanwhile, the pair tested the falling trendline (blue) as resistance.
That blocked Dogecoin’s attempts to log a full-fledged breakout until this weekend that saw the cryptocurrency breaking above the Descending Triangle range, on the whole.
But the Triangle breakout still requires additional bullish confirmation. As of now, traders with an upside bias appear cautious near the dashed black line. It represents a resistance level (at $0.40), that the Dogecoin bulls have repeatedly failed to flip support as of late.
As the price approaches the resistance level, one of two outcomes expects to occur. The first outcome looks bullish. In it, traders will take the Dogecoin prices above the dashed resistance level, thus validating the Triangle breakout pattern. That said, the DOGE/USD exchange rate would eye a rally towards $0.47 or higher.
The other outcome is that Dogecoin will lose its upside momentum near the dashed resistance trendline. As a result, the price will fall back to test the Triangle’s lower trendline as support.
Dogecoin vs Ethereum
Dogecoin is famously propelled by the hype its proponents create on social media platforms. Presided by the famous billionaire-entrepreneur Elon Musk, the DOGE army has strong leverage to influence the token’s price. Dogecoin-related tweets from the self-proclaimed “DogeFather” send the price soaring.
As the hype temporarily died down, so did the token rally. Trading at $0.38 against the USD on Monday, the meme-token has been overshadowed by the bullish rally from another cryptocurrency. The crypto community was preoccupied with Ethereum for the past few days, as it broke the $3,000 resistance and traded at $3,176 on Monday.
Given DOGE’s high volatility and the dependency on social media coverage, it is upon the traders to decide the token’s fate. If they band together to break the resistance line, the token could hit $0.50, fitting the descending triangle indicator’s prediction. If not, the price could descend against the $0.40 resistance, possibly bouncing back as it hits the $0.20 support line.