Dogecoin (DOGE), the original meme cryptocurrency, is currently navigating a challenging period. Since reaching a local high of $0.4795 on November 23, DOGE has seen a decline of approximately 16%. Analysts suggest that Dogecoin’s near-term recovery might heavily depend on the broader trajectory of Bitcoin (BTC).
Dogecoin Price At Risk Of Another Slump
The technical landscape for Dogecoin appears daunting as a previously strong uptrend line, established in mid-November, has transformed into a resistance barrier. Despite several attempts by Dogecoin bulls to reclaim this critical support line, success has eluded them. Crypto analyst Kevin (@Kev_Capital_TA) highlights that DOGE is facing rejection after retesting this trend line, which was maintained for nearly a month, now coinciding with the macro 0.786 Fibonacci level—often a significant reversal point.
Internal momentum indicators further complicate the outlook. Kevin points out that DOGE’s daily Moving Average Convergence Divergence (MACD) indicates robust downward momentum, suggesting a bearish short- to mid-term bias unless broader crypto trends shift positively.
Analyzing DOGE’s Future Price Movement
In Kevin’s analysis, a bullish movement in Bitcoin could safeguard DOGE from further declines. He identifies $0.32 as a key downside level, the origin of the previous uptrend, and warns that failure to hold above this could lead to a move towards the $0.29 to $0.26 range. Additionally, DOGE is currently navigating between two significant Fibonacci levels—the macro golden pocket at approximately $0.47 and the macro 0.5 Fib level near $0.39. A strong move beyond these levels could precipitate significant volatility.
Kevin asserts that Dogecoin’s fate is presently intertwined with Bitcoin’s. He believes that focusing excessively on DOGE’s standalone performance might be futile as its trajectory is largely dependent on BTC. For long-term holders like himself, the focus remains on the broader cycle rather than short-term fluctuations.
The Silver Lining: Potential Bullish Signals
Despite the challenges, there is a potential bullish indicator in play. Kevin is monitoring a possible hidden bullish divergence on DOGE’s daily chart. This pattern can occur when price trends higher over time while momentum indicators, such as the Relative Strength Index (RSI), trend lower. Such divergences may indicate underlying market strength, but Kevin stresses that Bitcoin’s cooperation is crucial for this to materialize.
What About Bitcoin?
Bitcoin itself is experiencing a period of consolidation, “squeezing” between an upward trend line and a macro golden pocket. This tightening pattern suggests an imminent resolution, with a breakout in either direction likely. Kevin predicts that this consolidation will soon result in a decisive move, carrying significant implications for the broader market.
On the liquidity front, Kevin observes considerable upside potential for Bitcoin. He notes accumulated liquidity over the past 48 hours aligning with key Fibonacci levels and mentions whale activity in purchasing large options calls for MicroStrategy (MSTR) stock, potentially anticipating a BTC rally. Should Bitcoin indeed surge, it could provide Dogecoin with the necessary support to stabilize and potentially reverse its current downtrend.
As of the latest update, DOGE is trading at $0.405. The coming days will be critical in determining whether DOGE can overcome its current challenges and align with any positive movements in Bitcoin.
