While some market watchers remain optimistic about the long-term prospects of Dogecoin (DOGE), an analyst has identified a continuation of a bearish pattern on the short-term chart that could lead to another major correction for memecoin.
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The bottom of Dogecoin may be lower
On Monday, Dogecoin rallied 3% from Sunday’s lows and retook the $0.091 level that was hit at the end of the week due to market volatility caused by the Middle East conflict.
The cryptocurrency has traded between $0.086 and $0.100 over the past two weeks, hitting a weekly high of $0.104 last Wednesday before erasing the bounce and falling to its local lows along with other markets.
In the process, market watcher Ali Martinez noted that the cryptocurrency has been consolidating in a descending triangle since the mid-January correction, indicating that a continuation of the potential bullish trend could be just around the corner.
The chart shows that DOGE is showing a drop of about 37% over the sample. Meanwhile, downtrend resistance is currently around $0.097.
According to the analyst, memecoin will move down by 37%, targeting the area of $0.060, if the price falls from the base of the pattern and loses its support role.
The analyst previously warned that Dogecoin could find its next support level around this level if selling pressure persists. Notably, the $0.060 level served as a macro resistance and support level, indicating the end of the bear market in 2022 and a normal bounce level when the market recovers in late 2023.
Analysts are optimistic about DOGE’s macro chart
Despite the weak performance and forecasts of price declines, other market observers expressed an optimistic outlook for Dogecoin in the medium to long term.
Analyst Trader Tardigrade advised investors to bearish on the DOGE chart, noting that the broader outlook for memecoin looks “crazy.” In an X post, the analyst noted a huge high pennant on Dogecoin’s monthly chart, indicating the possibility of a major breakout.
According to the chart, the pattern is formed from the 2021 breakout, and the cryptocurrency has retested and held the lower boundary as support twice over the past five years, leading to a major rally after each retest.
Now, Dogecoin is retesting this level for the third time, managing the monthly closing of the lower boundary in February. This set up a potential price recovery rally if history repeats itself. “When this goes up, expect a huge boost. The setup is ready.”
Meanwhile, analyst Bitcoinsensus suggested that memecoin could be poised for a massive rally based on its performance throughout this market phase. As he detailed, DOGE’s price action from the end of 2022 will occur in “small cycles”, each time leading to a higher rally.
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The structure consisted of accumulation, marking, and withdrawal phases, resulting in 190% and 480% rallies in early and late 2024, respectively.
Now, as Dogecoin continues to rally for the third time, it could break down to the $0.75 area in the coming months if it breaks out of its one-year downtrend line and repeats the “mini-cycle” pattern.
Featured image from Unsplash.com, Chart from TradingView.com
