Dogecoin Triangle Formation Breakdown Indicates Caution – 15% Move Expected?

As the cryptocurrency market experiences a recent pullback, Dogecoin is trying to establish crucial support that could pave the way for a recovery rally. However, analysts warn that the downward trend may continue and a potential drop to lower levels could be on the horizon.

Key Takeaways

Dogecoin has dropped over 50% since early October and is now trying to maintain support at $0.120.
Market analysts advise caution, indicating that additional downward movement towards the $0.096 and $0.080 levels may be forthcoming.
A lack of bullish structure and low buying volume raises concerns about Dogecoin's recovery prospects.
The formation of a new symmetrical triangle pattern may result in a significant price move of up to 15%.

Dogecoin, DOGE

Dogecoin has faced significant declines recently, with a notable 4.2% drop leading it to struggle within the $0.120-$0.135 price range. While some analysts suggest a possible recovery, others indicate a lack of bullish momentum and caution against further declines.

Current Market Situation for Dogecoin

On Friday, Dogecoin experienced yet another day of decline, dropping 4.2% from the $0.126 range due to ongoing market volatility. The cryptocurrency has receded over 50% from its early October highs and has struggled to maintain key support levels over the past two months.

After losing the $0.135 mark nearly two weeks ago, Dogecoin has been trapped within the $0.120-$0.135 range, unable to break through the upper limit despite multiple attempts. Currently, the leading memecoin by market capitalization is working to hold its crucial $0.120 support zone to prevent further declines.

Due to this situation, some market observers are urging caution as the year comes to an end. An analyst on the social platform X, known as More Crypto Online, emphasized that Dogecoin “is still a falling knife,” suggesting that its corrective phase may not yet be complete.

Dogecoin

He explained, “There’s no evidence that wave B has bottomed,” implying a potential 20% decline towards the next significant support levels of $0.096 and $0.08. The analyst recommends waiting for signs of a 5-wave upward move before considering any buys.

Another analyst, Crypto Jobs, supports the cautious approach, stating that Dogecoin does not exhibit a bullish reversal structure and that buying volume remains weak, unlike many other altcoins. He noted that momentum remains bearish and as long as DOGE stays below the $0.14-$0.15 range, bulls will struggle to gain control, maintaining the bearish trend.

"There’s no buy pressure at the moment, with insufficient volume. The lack of a bullish structure indicates a realistic scenario of another drop towards the $0.100 – $0.095 support. A sideways phase is in play in the short term, with the possibility of a brief bullish move before another potential downturn."

Is a Price Breakdown for DOGE Imminent?

Market analyst BitGuru suggests that Dogecoin's deep correction may now be over. He points out that the cryptocurrency is currently located in a significant demand zone, between the $0.120-$0.130, where liquidity has already been addressed.

Based on this insight, he forecasts that reclaiming the late November highs could set up a recovery rally targeting the $0.18 resistance. Conversely, if the current levels are not maintained, it may indicate ongoing consolidation for Dogecoin.

Trader Tardigrade further notes that the price has reached its target after breaking down from a symmetrical triangle pattern earlier this month. As Dogecoin forms another pattern, he describes it as “searching for a new trend,” adding that the cryptocurrency is currently developing a new symmetrical triangle on the H4 chart that may lead to a price move of about 15%, either up or down.

Notably, Friday's market pullback pushed Dogecoin below the triangle's lower boundary around the $0.123 mark, signaling a possible drop to the $0.10-$0.11 level unless there is a quick price rebound.

At the time of this writing, Dogecoin is trading at $0.122, reflecting a 7.3% decline over the week.

Dogecoin, DOGE, DOGEUSDT