Is Dogecoin Facing a Significant Decline? Analyst Signals 2022-Like Patterns

As Bitcoin appears to be hinting at a short-term recovery, Dogecoin may be gearing up for a more considerable decline. This warning comes from the pseudonymous analyst VisionPulsed, who notes that certain familiar patterns from 2022 are resurfacing among major cryptocurrencies and meme coins.

Key Takeaways

Analyst VisionPulsed warns that Dogecoin may be facing significant declines, echoing trends from 2022.
Bitcoin's daily stochastic RSI is resetting, which historically leads to price lows.
Dogecoin is making lower lows, contrasting Bitcoin's attempts to form higher lows.
The "peanut zone" is projected around $0.20, but deeper declines to $0.05 are anticipated without trend changes.

Dogecoin price news

In a video shared on December 16, the analyst highlights Bitcoin's daily stochastic RSI, which has transitioned from overbought conditions back toward oversold levels. Historically, every reset similar to this over the past two months has corresponded with new price lows. This time, however, VisionPulsed believes the situation is slightly altered, which could significantly influence how Dogecoin behaves.

Dogecoin Observers Should Monitor Bitcoin's Stochastic Reset

Regarding Bitcoin, VisionPulsed mentions that the daily stochastic RSI is nearing oversold territory following a period of high levels. Throughout October, November, and early December, similar transitions from overbought to oversold on the daily timeframe led to new lows for Bitcoin.

Bitcoin Stoch RSI

"This is the first time the stock RSI is moving from overbought to oversold without necessarily making a new low," he explains, noting that it’s still “too early” to make definitive predictions. If the price manages to create a higher low during the oscillator's reset, he suggests that this could indicate a short- to medium-term trend reversal instead of a significant change in the macro trend, potentially paving the way for a relief rally.

"If we see a higher low form on the price during this reset of the stock RSI, it should signal the green light for a relief rally," he notes. Conversely, if the current low is broken, the rally would lead to significant declines, as he emphasizes that the bullish scenario relies on the higher-low structure remaining intact on the daily chart.

However, VisionPulsed considers the situation with Dogecoin to be more precarious. While Bitcoin seeks to establish a higher low, Dogecoin continues to mark lower lows within the same timeframe. He draws a parallel to similar divergences seen in 2022, when Dogecoin experienced declines while Bitcoin formed higher lows.

Dogecoin marks lower lows

“Very similar to 2022," he states, pointing out that Bitcoin was managing to make “a higher low” while Dogecoin was not. This trend suggests that while Doge might benefit from a Bitcoin rally, it would do so from a much weaker position.

What Price Level Could DOGE Reach?

In this context, VisionPulsed suggests a rally could occur, potentially positioning Dogecoin around the $0.20 mark in January, which he refers to as the "peanut zone." He cautions that this could be a final opportunity for traders to act before Dogecoin likely resumes a downtrend, which could lead the cryptocurrency to fall to new lows around the $0.05 to $0.06 range.

The prevailing expectation for Dogecoin is a more profound retracement. "We’re coming down to feed the little piggies. Oink oink," he comments. Until Dogecoin breaks its ongoing downtrend, he sees no compelling reason to view it as a bullish asset.

The timeline for these developments hinges on Bitcoin's performance in the lower band of a 7-8 day Gaussian channel and interactions among various moving averages. VisionPulsed notes that Bitcoin has already been in this “peanut gallery” zone for nearly four weeks, contrasting sharply with the roughly 63 days it spent during the 2022 accumulation phase.

If Bitcoin remains close to the upper range of the current structure by the end of January, he believes it could mirror 2022, likely followed by a capitulation phase downward.

A critical indicator to watch will be the convergence of a white and green moving average, historically significant as it marked a “point of no return" before Bitcoin's substantial decline in 2022. This convergence is projected to occur in late January or early February.

Bitcoin MA Ribbon SMAs

Once the moving averages converge, VisionPulsed’s expectation is that Bitcoin will drop through the blue moving average and test the red moving average, potentially reaching a downside target in the $50,000–$60,000 range. Under this scenario, he anticipates that Dogecoin will decline to the $0.05 price point.

At press time, DOGE was valued at $0.12974.

Dogecoin price