Dogecoin (DOGE) is in a consolidation phase after experiencing a robust downtrend, indicating that the cryptocurrency is at a critical juncture. A crypto expert’s technical evaluation suggests that while Dogecoin’s recent uptrend could proceed, traders should remain cautious on account of the specter of a false breakout.
Dogecoin Price Rally Or False Breakout?
Based on TradingView crypto analyst, ‘EliteFxAcademy_CRYPTO,’ the Dogecoin price is currently consolidating between key zones, indicating that a potential breakout could also be on the horizon. After witnessing a severe price decline, Dogecoin has been trading inside an outlined range on the 4-hour chart, with support levels around $0.158 – $0.165 situated across the lower zones to forestall further breakdowns.
The evaluation revealed that Dogecoin’s downturn has transformed right into a consolidation phase, where the cryptocurrency is stabilizing and possibly preparing for an additional leg up. Moreover, the TradingView expert shared critical resistance areas between $0.175 and $0.18, present in the upper zones, that function a barrier to limit stronger upward movement.
Until Dogecoin can break out of its resistance zone, its price is anticipated to stay range-bound. The analyst predicts that a break above resistance zones could potentially signal further growth within the meme coin’s price. Conversely, a drop below key support levels may fuel additional declines in Dogecoin’s already low price.
Historically, a chronic consolidation in a cryptocurrency often precedes a strong rebound to the upside. If Dogecoin manages to surpass resistance levels, its price consolidation may end, signaling the continuation of its previous uptrend. This trend reversal is anticipated to push the cryptocurrency’s price toward the $0.19 -$0.2 goal and above.
While this bullish outlook could yield a decisively strong move from Dogecoin’s current lows, the TradingView analyst warns of the opportunity of a false breakout. It is a scenario where the worth of a cryptocurrency momentarily breaches the resistance or support level before swiftly reversing. Since Dogecoin has tested these zones multiple times, the crypto expert has cautioned traders to look out for confirmation signals akin to substantial volume or sustained price motion beyond the range.
In an alternatively bearish scenario, the TradingView expert has predicted that Dogecoin could decline as little as $0.15 if it experiences a stronger decline below its support range. This might represent an 11.24% decline from recent lows.
What’s Next For Dogecoin?
The Dogecoin price is currently trading at $0.169 after recording a decline of over 40% up to now month. While this downturn has shaken the market, crypto analyst Ali Martinez shares a bullish outlook for Dogecoin, predicting that the cryptocurrency is gearing up for a 16% price swing soon.
The analyst’s optimistic forecast is contingent on Dogecoin’s ability to interrupt out of its current Ascending Triangle chart pattern. If the cryptocurrency can reclaim the ascending trendline and bounce back above $0.19, it could push toward resistance and attempt a breakout.
Conversely, the chart highlights a critical zone where the Dogecoin price is dropping below the trendline, suggesting a possible bearish breakdown toward the $0.16 – $0.158 support zone.
Featured image from DALL-E, chart from TradingView
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