Dogecoin Crisis : 30% Crash on the Horizon ?
The recent Dogecoin rally, fueled by a wave of optimism due to Donald Trump’s announcement of a pause on tariffs, quickly fizzled out.
According to RLinda’s technical analysis, the memecoin failed to confirm a breakout above the resistance zone ranging between $0.157 and $0.1622. After briefly reaching $0.163, Dogecoin dropped below the critical level of $0.16, signaling a clear false breakout.
This movement is particularly significant as it comes after a widespread market surge driven by Bitcoin, which surged 10% from $75,200 to $84,300 over the same period. However, with Bitcoin dropping back to around $83,500, the positive impact on altcoins like Dogecoin has faded. Currently, Dogecoin is consolidating just below the resistance at $0.163, revealing a lack of bullish momentum.
The daily Ichimoku confirms the bearish trend, with a resistance at $0.17 to surpass and maintain as support for a potential recovery. Nevertheless, the cloud has turned green in 4H, indicating a possible rebound if the market and Bitcoin climb again.
However, this failure to sustain buying pressure highlights a structural weakness. Far from a trend reversal, this rally was merely a temporary reaction to external news, and the risk of continuing correction remains high.
A 30% Drop According to Analysts
RLinda highlights in their analysis that Dogecoin is still moving within a descending channel, characterized by lower highs and lower lows since February 14. The false breakout above $0.162 offered hope of an exit from this downtrend channel, but the reality is different. With nearly a 50% drop in trading volumes in 24 hours, the dominance of sellers is evident, and the momentum is strongly leaning towards further decline.
If Dogecoin fails to reclaim the resistance zone quickly (between $0.17 and $0.18 in red), several critical support levels will be tested. A close below the $0.13646 threshold could push the price towards $0.1277 and even $0.1154.
Moreso, a weekly drop to $0.14217 opens the way for a 30% correction, with major support at $0.1025 as the last line of defense. RLinda also does not rule out a retest of the descending channel resistance before a new dive, which would bolster the bearish pressure.
Which Indicators to Follow ?
From a technical standpoint, several signals support this bearish scenario. The RSI (Relative Strength Index) remains in the oversold zone, indicating persistent weakness from buyers. Additionally, the decline in transaction volumes reflects increasing disinterest, a common trait during prolonged correction phases.
Beyond technical analysis, the macroeconomic context plays a crucial role. While Trump’s tariff pause briefly boosted Bitcoin and altcoins, the effect is fading fast. Investors, including whales, appear to be taking a cautious stance, limiting fresh capital injections into highly volatile assets like Dogecoin. This lack of fundamental support heightens the risk of a decline.
Faced with this setup, caution is advised. Could Dogecoin find short-term support, or are we on the brink of an even more severe correction? According to Coinvo, Dogecoin is gearing up for a significant move to $1.26.
