Dogecoin (DOGE) has experienced continued selling pressure, slipping below the $0.17 support level in the last 24 hours. This decline aligns with the broader market downturn, which has also impacted other cryptocurrencies.
Despite this setback, a fresh technical analysis from crypto analyst Trader Tardigrade suggests that Dogecoin remains within a historically significant macro channel. If the price stays within this range, it could indicate that the bottom has already formed, potentially leading to a breakout in the coming months.
Dogecoin’s Macro Channel And Price Action
Analyzing DOGEcoin’s price action on the monthly candlestick chart, Trader Tardigrade highlighted that DOGE has consistently followed a well-defined uptrend macro channel since its inception. This channel has played a crucial role in shaping its long-term trajectory. However, historical data reveals instances where Dogecoin has briefly deviated above or below the channel’s boundaries before reverting back inside.
Since January, DOGE has seen a steady decline, bringing it closer to the lower boundary of this macro channel. The key question now is whether Dogecoin will rebound from this trendline or temporarily dip below it, trading beneath the trendline for a few months.
Possible Scenarios: Holding Vs. Deviating Below Trendline
Trader Tardigrade pointed out that if Dogecoin manages to stay within the macro channel without breaking below the lower trendline, it would confirm that the price has already bottomed out. This scenario closely mirrors the 2017 price movement, where Dogecoin respected the lower boundary and then experienced a strong rebound, leading to a sustained uptrend in the months that followed.
However, past price behavior from 2020 indicates that a temporary deviation below the trendline remains a possibility. If this happens, DOGE could trade below this support for a few months before making a recovery. Currently, this lower trendline is positioned at around $0.15, making it a crucial level to watch.
Analyst Predicts $6 Target: How Can Dogecoin Get There?
Despite the recent downturn, Trader Tardigrade remains bullish on Dogecoin’s long-term prospects. The analyst predicts a potential surge toward $6, provided DOGE maintains its macro structure and repeats its 2017 pattern.
At the time of writing, Dogecoin is trading at $0.1687, having lost its crucial $0.17 support level in the past 24 hours. This loss has fueled bearish sentiment, increasing the likelihood of further downside movement in the short term.
Technical indicators suggest that Dogecoin may still decline before finding strong support. The next major level to watch is $0.15, as this aligns with the lower macro trendline. Indicators like the Relative Strength Index (RSI) will be key in determining when DOGE might reach oversold levels and establish a firm bottom at $0.15.
Short-Term Uncertainty, Long-Term Potential
Dogecoin’s recent price action suggests short-term uncertainty, with the possibility of further declines toward $0.15. However, historical patterns indicate that maintaining its macro structure could set the stage for a significant price surge in the future.
If DOGE follows past trends and rebounds from the lower trendline, the projected $6 price target could become a reality over time. For now, traders and investors should closely monitor key support levels and technical indicators to assess the next major move in Dogecoin’s price action.
The Information is Collected from Bitcoinist and Binance.
