- Dogecoin pokes key resistance at two-month high after a stellar rally.
- DOGE surged on risk-on sentiment, technical breakout but overbought RSI and 200-EMA check the bullish momentum.
- Pullback appears elusive beyond $0.18, with $0.23 serving as an extra filter toward the north.
Dogecoin (DOGE/USD) bulls take a breather at the highest level in two months, after its biggest daily jump since March, reaching its highest level in two months. During Friday’s European session, DOGE is facing key technical resistance around $0.21.
A strong breakout above a two-month-old downward trend line, now acting as support, combined with bullish signals from the Moving Average Convergence and Divergence (MACD) indicator, helped fuel the recent rally.
On the fundamental side, the momentum was driven by positive news, including a broad “risk-on” mood tied to the US trade deal and growing crypto reserves among US states. However, overbought conditions of the Relative Strength Index (RSI) 14 and the 200-day Exponential Moving Average (EMA) currently challenge the DOGE/USD’s further advances.
Technical chart: Daily chart suggests imminent pullback
Source: Trading view
The 200-day EMA around $0.2155 is the first hurdle for Dogecoin bulls to clear in order to maintain momentum. After that, a five-month-long descending trend line near $0.2320 will act as another challenge. The next major resistance zone lies between $0.3000-$0.3100, an area that has been key since December.
If DOGE stays above $0.3100, despite overbought RSI signals, attention will shift to the November 2024 resistance line around $0.3430. A breakout here could open the door for Dogecoin to target the highs near $0.4340 in January 2025 and $0.4845 from December 2024.
A pullback in Dogecoin wouldn’t be significant as long as it stays above the former resistance-turned-support around $0.1820. Below that, the monthly low of $0.1642 becomes a critical test for DOGE bears. If prices break that, attention will shift to key support levels near $0.1440 and $0.1310, marked since July and September 2024.
DOGE/USD: Four-hour chart gives more details
Source: Trading view
On the four-hour chart, Dogecoin’s recent pullback can be traced to its failure to break through the 78.6% Fibonacci Extension (FE) near $0.2130, combined with overbought RSI conditions. This suggests an immediate pullback to the 61.8% FE level around $0.2029, with further support coming from the former resistance-turned-support line and the 38.2% FE near $0.1880.
However, DOGE/USD bears should stay cautious unless there’s a clear break below the 200-bar Simple Moving Average (SMA) at $0.1678.
On the flip side, a strong move above the 78.6% FE level at $0.2134 could quickly push Dogecoin toward March’s peak near $0.2200, with the next key target at the 100% FE level around $0.2268.
In summary, Dogecoin buyers are gearing up for key resistance levels, with the market in a consolidation phase before the next potential breakout.
