While some market observers remain confident about Dogecoin’s (DOGE) long-term prospects, an analyst has identified a bearish continuation pattern on the short-term chart that could lead to another major memecoin correction.

Dogecoin’s bottom may be lower

On Monday, Dogecoin rebounded 3% from Sunday’s lows and regained the $0.091 level that was lost over the weekend due to recent market volatility sparked by the Middle East conflict.

The cryptocurrency has traded between $0.086 and $0.100 over the past two weeks, hitting a weekly high of $0.104 last Wednesday before erasing the rebound and falling to local lows along with the rest of the market.

During these results, market watcher Ali Martinez noticed that the cryptocurrency has been consolidating in a descending triangle since the mid-January correction, signaling that a potential continuation of the downtrend could be just around the corner.

As the chart shows, DOGE established a low near the $0.088 level, down almost 37% from the high of the pattern. Meanwhile, bearish trendline resistance is currently around $0.097.

According to the analyst, memecoin is preparing for a 37% move down, targeting the $0.060 area if the price falls below the base of the pattern and loses its support role.

The analyst previously warned that Dogecoin could identify its next significant support level around this level if selling pressure continues. Notably, the $0.060 level served as a macro resistance and support level, marking the bottom of the 2022 bear market and a key rebound level during the market recovery in tardy 2023.

Analysts are confident about the DOGE macro chart

Despite the tender performance and bearish price outlook, other market observers expressed a more confident outlook for Dogecoin in the medium and long term.

Analyst Trader Tardigrades deliberate investors should zoom out on the DOGE chart, which suggests memecoin’s broader outlook appears “wildly optimistic.” In post X, the analyst highlighted a massive bullish pennant on Dogecoin’s monthly chart, signaling a major breakout is likely.

According to the chart, the pattern has been forming since the 2021 breakout, and the cryptocurrency has tested twice in the last five years and held the lower boundary as support, leading to a significant rebound after each retest.

Now Dogecoin has retested this level for the third time, reaching a monthly close near the lower boundary in February. If history repeats itself, this will lead to potential price increases. “When things break out, expect massive growth. The setup is ready.”

Meanwhile, Bitcoinsensus analyst suggested that memecoin could be poised for massive growth based on its performance in this phase of the market. As he detailed, DOGE’s price action has been occurring in “mini cycles” since the 2022 low, leading to higher gains each time.

The structure consisted of accumulation, margin and withdrawal phases, leading to growth of 190% and 480% at the beginning and end of 2024, respectively.

Now that Dogecoin is accumulating for the third time, there could be a breakout towards the $0.75 area in the coming months if it breaks the annual downtrend line and the “mini-cycle” pattern repeats.

Featured image from Unsplash.com, chart from TradingView.com