While some market observers remain optimistic about Dogecoin (DOGE)’s long-term prospects, an analyst has identified a bearish continuation pattern in the short-term chart that could lead to another major correction for the memecoin.
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Dogecoin Bottom May Be Lower
On Monday, Dogecoin bounced 3% from Sunday’s lows and reclaimed the $0.091 level, which had been lost over the weekend due to recent market volatility triggered by the Middle East conflict.
The cryptocurrency has traded between $0.086-$0.100 over the past two weeks, reaching an intraweek high of $0.104 last Wednesday before erasing the bounce and plunging to its local lows alongside the rest of the market.
During this performance, market observer Ali Martinez noted that the cryptocurrency has been consolidating in a descending triangle since the mid-January correction, signaling that a potential bearish trend continuation could be around the corner.
DOGE established a floor around the $0.088 level, the chart shows, representing a nearly 37% decline from the pattern’s top. Meanwhile, the descending trendline resistance is currently around $0.097.
According to the analyst, the memecoin is setting up for a 37% move to the downside, targeting the $0.060 area if the price falls below the pattern’s base and loses its support role.
The analyst had previously cautioned that Dogecoin could identify its next significant support level around this level if selling pressure persists. Notably, the $0.060 level served as a macro resistance and support level, marking the bear market bottom in 2022 and a pivotal bounce level during the market recovery in late 2023.
Analysts Optimistic About DOGE’s Macro Chart
Despite weak performance and bearish price forecasts, other market observers expressed a more optimistic outlook for Dogecoin in the mid- and long-term.
Analyst Trader Tardigrade advised investors to zoom out on DOGE’s chart, suggesting that the memecoin’s broader perspective appears “insanely bullish.” In an X post, the analyst highlighted a massive bullish pennant on Dogecoin’s monthly chart, signaling a major breakout is likely.
According to the chart, the pattern has been forming since 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 rebound after each retest.
Now, Dogecoin has retested this level a third time, managing a monthly close about the lower boundary in February. This has set up a potential price recovery rally if history repeats. “When this breaks to the upside, expect a massive surge. The setup is ready.”
Meanwhile, analyst Bitcoinsensus suggested that the memecoin could be preparing for a massive rally based on its performance throughout this market phase. As he detailed, DOGE’s price action has been unfolding in “mini cycles” since the 2022 bottom, leading to higher rallies each time.
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The structure has consisted of accumulation, markup, and pullback phases, resulting in 190% and 480% rallies in early and late 2024, respectively.
Now, as Dogecoin continues to accumulate for the third time, it could see a breakout toward the $0.75 area in the coming months if it breaks out of its one-year downtrend line and the “mini cycles” pattern repeats.
Featured Image from Unsplash.com, Chart from TradingView.com