Dogecoin price has been experiencing significant volatility in recent days, with analysts predicting a potential 59% drop. Recent technical analyses suggest that the DOGE price may be heading towards a major price correction. The breakdown of a long-standing ascending parallel channel that guided the price since 2018 marks a significant technical shift. The loss of this key trendline support suggests bearish momentum, with a rejection at the 0.786 Fibonacci retracement level adding to the uncertainty surrounding Dogecoin’s price.
A technical analyst noted that the next major support level lies at the 0.618 Fibonacci retracement, which is around $0.06167. This level coincides with previous consolidation zones, making it an important point of focus for traders. If the price continues to move lower, a drop to $0.060 could be possible, signaling a continued bearish trend if support levels fail to hold. A recent transfer of 300 million Dogecoin, valued at around $41.7 million, to the Binance exchange by a whale further adds to the uncertainty surrounding Dogecoin’s price.
Despite the bearish outlook, there are signs of a potential recovery for Dogecoin. A bullish divergence on the daily chart, as identified by Crypto trader Trader Tardigrade, suggests that the selling momentum may be weakening, potentially indicating a price reversal. Dogecoin price is currently testing the $0.135 price level, which had previously acted as both support and resistance during a consolidation stage in early 2023. If the price is able to sustain these supports, there is a possibility of DOGE price recovering and hitting a $2 high, according to analysts.
The overall market sentiment remains cautious despite the potential for a recovery. Recent whale activity and the price breakdown from the ascending channel contribute to the bearish outlook for Dogecoin. Crypto analyst Kev Capital advises market participants to watch for a reclaiming of the $0.18 level as a sign of a possible fakeout or short-term recovery. If Dogecoin manages to ‘flip’ this level and close above it, further resistance levels are set at $0.25 and $0.30. However, failure to break through the key levels at $0.18 and $0.20 could result in a slowdown in the memecoin’s recovery.
In conclusion, Dogecoin price is currently facing significant volatility and uncertainty, with analysts forecasting a potential 59% drop. While recent technical analyses suggest a bearish trend, there are also indications of a potential recovery with a bullish divergence on the daily chart. Market sentiment remains cautious, with the recent whale activity and price breakdown contributing to the bearish outlook. Traders should closely monitor key levels such as $0.18 and $0.20 for signs of a possible recovery or further downside movement in Dogecoin price.
