Dogecoin Price Slump Looms, Analyst Points To Only One Lifeline
Dogecoin (DOGE) has entered a period of weakness, down approximately 16% from its local high of $0.4795 on November 23. As the original memetic cryptocurrency struggles to recapture key technical levels, the consensus among some analysts is that DOGE’s ability to stabilize or recover may depend almost entirely on an external factor: Bitcoin’s trajectory.
Dogecoin Price Risks Another Plunge
Technical analysis suggests that the previously well-touted uptrend line established in mid-November has now turned into a formidable obstacle. After breaking above this support line earlier this week, Dogecoin bulls have made multiple attempts to push the price back above this support line. However, these efforts were unsuccessful.
Cryptocurrency analyst Kevin (@Kev_Capital_TA), who has been closely tracking the DOGE/USD 1-day chart, noted that DOGE “rejected on a retest of this trend line that we’ve held for almost a month, and it’s right in the middle of the macro.” 786 Fib Bonacci” – a technical area often associated with major turning points and potential reversals.
Outside of the trendline, the internal momentum indicator paints a challenging picture. Kevin highlighted that DOGE’s daily MACD is showing “strong downside momentum,” a technical signal that suggests the market’s short- to medium-term bias may be heading lower unless the broader crypto environment changes.
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In his view, “it’s safe to say that if Bitcoin doesn’t go higher, Dogecoin is more likely to go higher.” Low in the short to medium term. Still, a move higher in Bitcoin might save us. ” He identified $0.32 (the start of the previous uptrend line) as the primary downside target. If DOGE fails to hold above that level, traders may look at the $0.29 to $0.26 range as a potential next stop. point.
In another article by X, Kevin highlighted that Dogecoin price is fixed between two key long-term Fibonacci levels. He described DOGE as currently trading “between the macro gold pocket” (around $0.47) and the macro 0.5 Fib level near $0.39. He said a firm break above or below these key levels could trigger a “cascading” effect of what he called an “aggressive movement.”
He added: “My position is that DOGE cannot control itself and its fate is currently entirely in the hands of BTC, so focusing too much on the asset is a bit of a waste of time. I don’t see any sign that the cycle is over, so regardless of the short-term noise “
However, there is at least a silver lining worth noting. Kevin mentioned that he was “tracking (a) potential hidden bullish Divergence” on the DOGE daily chart. Hidden bullish divergence occurs when price action continues to move higher over an extended period of time, while momentum indicators such as the Relative Strength Index (RSI) trend lower.
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This pattern can sometimes indicate that the underlying strength of the market is greater than it appears on the surface. It’s currently “textbook beautiful,” as analysts put it, although it still needs the most significant help from Bitcoin. “BTC still needs to cooperate, so there are no guarantees,” Kevin commented.
What about Bitcoin?
Kevin noted that Bitcoin is currently “squeezed” between an uptrend support line and a macro gold pocket – a level derived from previous bull market highs to bear market lows. this Tightening price action Hinting at an imminent solution: Bitcoin is unlikely to remain compressed in this region for much longer. In either direction, a decisive breakthrough seems imminent and could have far-reaching consequences. “This upward consolidation won’t last long. We’ll soon experience failure in either direction,” predicts Kevin.
In terms of liquidity, Kevin believes there are significant upside liquidity barriers for BTC, noting that “liquidity accumulated” over the past 48 hours is consistent with the macro 1.703 Fibonacci level. He also mentioned observational data showing whales buying large numbers of options calling for MicroStrategy (MSTR) stock. Given that MicroStrategy holds well-known Bitcoin treasuries, such purchases may reflect expectations for BTC to move higher. If these whale and liquidity indicators are correct, and BTC does rise, DOGE may find the “one lifeline” it needs to stabilize and reverse the current downtrend.
At press time, DOGE was trading at $0.405.
Featured image created using DALL.E, chart from TradingView.com
