Dogecoin Consolidates After 40% Decline, Faces 11.24% Drop Risk
1min read Dogecoin (DOGE) is currently in a consolidation phase following a significant downtrend, indicating a critical juncture for the cryptocurrency. According to a crypto expert’s technical analysis, while Dogecoin’s recent uptrend could continue, traders should exercise caution due to the potential for a false breakout.
The analysis from TradingView suggests that Dogecoin is consolidating between key zones, with support levels around $0.158 – $0.165 preventing further breakdowns. This consolidation phase follows a severe price decline, and the cryptocurrency has been trading within a defined range on the 4-hour chart. The expert also identified critical resistance areas between $0.175 and $0.18, which could limit stronger upward movement.
Until Dogecoin breaks out of its resistance zone, its price is expected to remain range-bound. A break above the resistance zones could signal further growth, while a drop below key support levels may fuel additional declines. Historically, prolonged consolidation in a cryptocurrency often precedes a strong rebound. If Dogecoin surpasses resistance levels, its price consolidation may end, signaling the continuation of its previous uptrend and potentially pushing the cryptocurrency’s price toward the $0.19 -$0.2 target and above.
However, the analyst warns of the possibility of a false breakout, where the price momentarily breaches resistance or support levels before reversing. Given that Dogecoin has tested these zones multiple times, traders are advised to look for confirmation signals such as substantial volume or sustained price action beyond the range. In a bearish scenario, Dogecoin could decline as low as $0.15 if it experiences a stronger decline below its support range, representing an 11.24% decline from recent lows.
Currently, Dogecoin is trading at $0.169 after recording a decline of over 40% in the past month. Despite this downturn, crypto analyst Ali Martinez shares a bullish outlook, predicting that Dogecoin is gearing up for a 16% price swing. This optimistic forecast is contingent on Dogecoin’s ability to break out of its current Ascending Triangle chart pattern and reclaim the ascending trendline, pushing toward resistance and attempting a breakout. Conversely, if the cryptocurrency drops below the trendline, it could suggest a bearish breakdown toward the $0.16 – $0.158 support zone.
