After the latest market pullback, Dogecoin is trying to hold a key support area to open the door to a recovery. However, some analysts suggest that the cryptocurrency’s bleeding may not be over yet and a move to lower levels is looming.
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Dogecoin’s chart signals short-term caution
On Friday, Dogecoin recorded another intraday drop of 4.2% from the $0.126 area amid continued market volatility. The cryptocurrency has retraced more than 50% from its early October highs, losing several key support zones over the past two months.
After losing the $0.135 level almost two weeks ago, DOGE has been in a price range from $0.120 to $0.135, failing to break the upper range despite various attempts. Now, the biggest memecoin by market cap is trying to hold the key $0.120 support zone to prevent further bleeding.
Therefore, some market watchers advise caution during the last week of the year. UX post, analyst More Crypto Online confirmed that Dogecoin is “still a falling knife” as its corrective move does not appear to have been made yet.
“There is no evidence that wave B has bottomed out,” he explained, suggesting that a 20% decline towards the next key supports, the $0.096 and $0.08 levels, could be likely. According to the post, “Caution is advised until price shows the first micro 5-wave move up.”
Similarly, analyst Crypto Jobs warned that investors should remain cautious as Dogecoin does not show a bullish reversal structure and has weak buying volume, unlike several other altcoins.
He explained that momentum is bearish despite holding the key $0.12 level, adding that as long as the DOGE price remains below the $0.14-$0.15 area, the bulls will not be in control and the downtrend and bearish structure will remain intact.
No buying pressure at the moment, no volume. No bull structure… Under the main downtrend and channel, seeing another decline towards the lower support of $0.100-$0.09500 looks realistic. Short-term ongoing lateral phase (H4 prospects). We may also see some bullish movement ahead of a possible next wave down.
Doge’s price crash is imminent?
Market watcher BitGuru considers that DOGE’s deep correction is complete. He pointed out that the cryptocurrency is currently in a high demand zone, between the $0.120 and $0.130 levels, where liquidity has already been lost.
Based on this, he predicted that a retracement of late November levels could set the stage for a rally towards the $0.18 resistance. On the contrary, failure to sustain current levels would signal that Dogecoin will continue in a prolonged consolidation phase.
Meanwhile, Trader Tardigrade highlighted that the price of the cryptocurrency reached the target of its previous symmetrical triangle pattern after breaking down from the formation earlier this month.
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Now, Dogecoin is forming a new pattern and a “search for a new trend,” he added. According to the trader, DOGE has formed another symmetrical triangle pattern on the H4 chart in the past two weeks, which could be resolved by a 15% move towards a bearish or bullish trend.
Notably, Friday’s pullback sent the cryptocurrency below the pattern’s lower boundary, which is around the $0.123 mark, signaling that a drop towards the $0.10-$0.11 area is possible if the price doesn’t bounce back soon.
As of this writing, Dogecoin is trading at $0.122, down 7.3% on the weekly time frame.
Featured image from Unsplash.com, chart from TradingView.com
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