Dogecoin Faces 30% Correction Risk as Support Level Tested

Dogecoin, the leading meme cryptocurrency, is currently at a critical juncture, testing a pivotal support level at $0.168. This level has raised alarms in the crypto community, as a weekly close below this line could pave the way for a 30% correction, according to analyst Ali Charts. Conversely, bullish technical patterns hint at a possible 350% breakout if support holds.

DOGE has already dropped nearly 30% from its mid-May highs, retesting the crucial $0.168 support zone, a level that also held firm in April. A decisive breakdown could be catastrophic, as it could fall into a price “gap area” with minimal historical buying interest, making swift declines more likely. The crypto market is now in a wait-and-see mode, with weekly closes near this line being closely scrutinized, as they could determine DOGE’s short-term trajectory.

On the bullish side, Dogecoin is reportedly forming the handle of a multi-year cup-and-handle pattern, a rare and historically bullish chart structure. The symmetrical triangle's lower boundary coincides with current prices, adding more weight to the $0.168 level. Should DOGE break above the triangle's upper trendline, analysts project a price target near $0.75, based on the 1.618 Fibonacci extension of the cup’s depth. This would represent a massive 350% rally from current levels.

Despite these bullish possibilities, momentum indicators aren’t providing much optimism. The 50-day moving average recently fell below the 200-day, forming a death cross, a classic bearish signal. The MACD line continues to diverge below its signal line, signaling downward momentum. Meanwhile, the Relative Strength Index (RSI) is at 42 and falling below the neutral 50 level, suggesting selling pressure outweighs buying interest.

A major catalyst could arrive on June 15, when U.S. regulators are expected to decide on a spot Dogecoin ETF application. Approval could usher institutional money into DOGE and serve as a much-needed bullish jolt. A delay or rejection, however, might push Dogecoin into deeper declines. The approval of an ETF could provide a much-needed boost to Dogecoin's price, as it would increase the coin's accessibility and legitimacy in the eyes of traditional investors. An ETF would allow investors to gain exposure to Dogecoin without having to directly purchase and hold the cryptocurrency, making it a more attractive option for those who are risk-averse or unfamiliar with the complexities of cryptocurrency trading. Additionally, the approval of an ETF could lead to increased institutional investment in Dogecoin, further driving up its price.

However, the approval of an ETF is not guaranteed, and there are several regulatory hurdles that must be overcome before it can become a reality. The U.S. Securities and Exchange Commission (SEC) has been cautious in its approach to cryptocurrency ETFs, and it remains to be seen whether it will approve an ETF for Dogecoin in the near future. If the SEC does not approve an ETF, Dogecoin could continue to face downward pressure, and its price could fall below the $0.168 mark.

In addition to the potential approval of an ETF, there are other factors that could impact Dogecoin's price in the coming months. One such factor is the overall sentiment towards cryptocurrencies, which has been volatile in recent months. If investor sentiment towards cryptocurrencies improves, it could provide a boost to Dogecoin's price. Conversely, if sentiment turns negative, it could exacerbate the coin's decline. Another factor to consider is the level of adoption and usage of Dogecoin. As more merchants and businesses begin to accept Dogecoin as a form of payment, its value could increase. However, if adoption remains stagnant, it could limit the coin's potential for growth. Additionally, the level of competition from other cryptocurrencies could impact Dogecoin's price, as investors may choose to allocate their funds to other coins that offer more attractive features or use cases.

According to the analyst's forecast, Dogecoin has recorded 13 green days out of the last 30, with daily price volatility averaging 10.57%. Their projection places DOGE at $0.20 by July 18, indicating a potential 17% upside from current prices. However, market sentiment remains neutral, and on-chain indicators are not showing clear bullish or bearish divergences. Whether Dogecoin rebounds or slides deeper, this week could prove pivotal. With technicals tightening and regulatory news pending, DOGE is at a make-or-break moment.