Dogecoin's Five-Month Rally Falters as Price Drops Below Key Fibonacci Level

Dogecoin (DOGE), the leading memecoin by market capitalization, has experienced a significant downturn, dropping below a crucial Fibonacci retracement level and a short-term uptrend line. This development may signal the end of the cryptocurrency's five-month rally and its recovery from December lows.

The DOGE price has fallen below the 38.2% Fibonacci retracement level of the rally that began in August and peaked at around 48 cents in December. According to a fundamental rule of technical analysis, a market must maintain its current trend by holding above this level. If it fails to do so, the trend is considered to have ended.

The moving average convergence divergence (MACD) histogram is now printing deeper bars below the zero line, indicating a strengthening bearish momentum. Additionally, the five- and 10-day simple moving averages (SMAs) are trending south, further hinting at a bearish bias.

Support for DOGE is seen at around 26 cents, the low printed on Dec. 20, followed by 23.4 cents, which marks the 61.8% retracement of the August-December rally. To invalidate the bearish outlook, DOGE would need to recover to the uptrend line from December lows.