Dogecoin Faces 59% Drop as Whale Transfers $41.7M to Binance

Dogecoin has been experiencing significant volatility in recent days, with analysts forecasting a potential 59% drop. Recent technical analyses suggest that the DOGE price might be heading toward a major price correction. The cryptocurrency has broken below a long-standing ascending parallel channel that had guided the price since 2018, marking a significant technical shift. This breach suggests bearish momentum, as the breakdown coincides with a rejection at the 0.786 Fibonacci retracement level, located at approximately $0.16395.

A technical analyst observed that the breakdown from this channel could lead to further declines. 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. However, if the price continues to move lower, a drop to $0.060 could be possible. The breakdown could signal a continued bearish trend if support levels fail to hold, aligning with a recent DOGE price prediction.

Amid this trend, a whale has transferred 300 million Dogecoin, valued at around $41.7 million, to the Binance exchange, adding to the uncertainty surrounding Dogecoin’s price. Nevertheless, there is a sign of hope for a bounce back as this indicates that there was a breakdown recently. Dogecoin has hints of a bullish divergence on the daily chart, as per Crypto trader Trader Tardigrade. This pattern is evident when the price goes lower while the Relative Strength Index (RSI) bounces and posts higher lows. This suggests that the selling momentum may be weakening, potentially indicating a price reversal.

Dogecoin price is currently in the process of testing the $0.135 price level, which used to act as both support and resistance. The level had been holding firm throughout a consolidation stage in early 2023, and the breakdown may present a reversal pattern. According to the analysts, if the price of the Dogecoin will be able to sustain these supports, there is a possibility that DOGE price may recover and hit a $2 high. $0.135 is significant because it has served as both support and resistance. If the price bounces from this level, we are likely to see the start of a new bulls trend. But if the support is not maintained, it is open for more downside movement. In such a case, the price may drop lower and in extreme cases test $0.12 or even $0.10.

Despite the bullish divergence and potential for a recovery, the overall market sentiment remains cautious. The recent whale activity, alongside the price breakdown from the ascending channel, adds to the bearish outlook for Dogecoin. According to an X post by crypto analyst Kev Capital, market participants should watch for a reclaiming of the $0.18 level as a sign of a possible fakeout or short-term recovery. If Dogecoin is going to ‘flip’ this level and close above it, further resistance levels are set at $0.25 and $0.30. However, if the price fails to break through the key levels at $0.18 and $0.20, the memecoin may experience a slowdown in its recovery.