TLDR
- Dogecoin (DOGE) has been in a prolonged downtrend, forming a descending wedge pattern
- DOGE fell approximately 30% in the past week, trading around $0.17
- Key support levels identified at $0.16 and $0.13, with potential final support at $0.08
- Elliott Wave analysis suggests the correction may be nearing completion
- Technical indicators show potential for a bullish reversal if key support levels hold
Dogecoin (DOGE) has continued its downward trend since reaching highs in December, with the popular meme cryptocurrency experiencing a sharp 30% decline over the past week. The token is currently trading around $0.17, down from previous support levels.
The price movement has formed what analysts describe as a descending wedge pattern on higher time frame charts. This technical formation often precedes potential breakouts if buying momentum returns to the market.
Elliott Wave analysis suggests that DOGE may be completing its final corrective wave. The price has reached the 0.786 Fibonacci retracement level at $0.171, which has historically served as a significant level for trend reversals in the asset.
DOGE Price
The 4-hour chart reveals that after completing a five-wave impulse to $0.48 in December, DOGE entered an ABCDE correction phase. Current price action indicates that Wave E may be in its final stages as the token tests the lower boundary of the wedge pattern.
Technical indicators are providing mixed signals. The Relative Strength Index (RSI) is hovering near oversold territory on longer timeframes, which could support the case for a potential rebound in the near future.
Technical Analysis
Several analysts have identified key demand zones that could serve as strong support for DOGE. These areas represent potential buying opportunities for investors looking to dollar-cost average their positions or begin accumulating the asset.
The first major support level was at $0.20, which has already been breached during recent selling pressure. This leaves the next critical support zones at $0.16 and $0.13, according to TradingView analyst “TheGift94.”
A more bearish outlook from analyst “MMBTtrader” suggests that DOGE could potentially fall to $0.08131 before finding strong global support. This level was last seen in August and would represent an over 53% decline from recent prices.
However, even bearish analysts maintain long-term bullish price targets. Some market watchers suggest DOGE still has potential to reach much higher prices before the end of the current market cycle, despite the current downturn.
The 1-hour chart shows early signs of bullish divergence in the RSI indicator. This technical signal suggests that selling pressure may be weakening, potentially providing momentum for a reversal in upcoming trading sessions.
If DOGE confirms a breakout from its current pattern, the first resistance to watch will be the 0.618 Fibonacci retracement at $0.24. Breaking above this level could signal a trend reversal and push prices toward the 0.5 retracement at $0.288.
Failure to hold above the $0.171 support could result in further decline toward the $0.15 region or deeper. This would invalidate the immediate bullish scenario that some analysts are watching for.
The cryptocurrency currently has a market capitalization of approximately $25 billion, maintaining its position among the top digital assets despite recent price weakness.
Bitcoin’s slight rebound after dipping to $80,000 last week has provided some support for the broader crypto market. DOGE has shown correlation with Bitcoin’s movements, bouncing slightly from yesterday’s low of $0.1656.
Dogecoin’s price action over the coming days will be crucial to determine whether the token can hold key support levels and begin a recovery phase, or if further downside is likely in the short term.
