Dogecoin Drops 21% But Analysts See 90% Rally Ahead

Dogecoin, the popular meme coin, has recently experienced a notable bearish movement, with its price dropping to the $0.21 level. Despite this downturn, a crypto analyst has identified signs of an impending rally, suggesting that bullish momentum is gradually returning to the market. This optimism is fueled by the general market recovery following Bitcoin’s brief upswing, which has provided Dogecoin with renewed upward momentum.

Trader Tardigrade, a prominent crypto expert and investor, has outlined a formation that could significantly impact Dogecoin’s short-term price trajectory. According to Trader Tardigrade, Dogecoin is currently forming a leg in consolidation below the $0.25 resistance level after recent pullbacks. This marks the second leg in consolidation in less than a week, indicating a potential breakout toward the $0.4 level.

The first leg of consolidation occurred last Tuesday when Dogecoin failed to break above the immediate resistance at $0.25. Trader Tardigrade believes that Dogecoin is likely to break through this level following a shakeout below $0.21 to remove weak hands. However, the expert noted that DOGE would hit the resistance zone several times before breaking through. When a breakout finally takes place, Dogecoin is expected to rally hard toward the $0.4 mark, which was last seen in late January this year due to its previous explosive run. This level is another crucial resistance range for DOGE in its bullish journey.

The last time Dogecoin reached this key barrier, it caused a major pullback in the following months before DOGE gained traction again in April. In the event that Dogecoin revisits and breaks past the $0.4 zone, it may lead to an extension of the rally as buying pressure grows. With technical indicators aligning and market sentiment turning cautiously bullish, Dogecoin might be gearing up for its next major uptrend. Trader Tardigrade also identified an RSI (Relative Strength Index) Hidden Bullish Divergence on the 1-day chart, reflecting growing momentum for a bounce even as prices continue to fluctuate. Presently, the expert highlighted that the meme coin is forming a higher low, while the RSI is forming a lower low.

Ali Martinez, another seasoned crypto analyst, has underlined a critical resistance at $0.26 as the meme coin gears up for another upswing. According to the analyst, this level continues to be the most important resistance wall for DOGE. Breaking this level could mark the beginning of a bullish phase. The broader crypto market has taken a hit, but Dogecoin's recent developments suggest that it may be on the verge of a crucial breakout, with analysts eyeing $0.4 as the next key level. The meme coin's potential rally is supported by technical indicators and market sentiment, which are both turning cautiously bullish. As Dogecoin continues to consolidate below the $0.25 resistance level, investors are watching closely to see if it can break through this barrier and rally toward the $0.4 mark.