As Dogecoin (DOGE) retests key multi-year support, some analysts are predicting a bearish outlook for the largest memecoin by market capitalization, warning that its bottom may not be reached yet.
Dogecoin targets lower levels
On Thursday, Dogecoin made up most of the bounce from earlier in the week and retested the $0.090 area. Rekt Capital market observer highlighted DOGE’s latest results warn that the price correction may not be over yet.
As he explained, the leading memecoin lost its multi-year upward macrotrend in November, when it closed the month below the rising support that has held since the beginning of 2023.
As such, Dogecoin has officially confirmed its macro downtrend, which has begun to develop following a cycle high of $0.484 during the bull run in overdue 2024. The analyst noted that historically, the cryptocurrency has not retested a macro downtrend line until the price is ready to break it and retest post-breakout.
Based on this, he warned that memecoin is “unlikely to test a macro-downtrend anytime soon.” Currently, DOGE is trading at a low, which is also a key reaction zone that previously acted as resistance before turning into support in 2024.
According to Rekt Capital, previous bear market results suggest that Dogecoin will likely lose its current support area over time, but noted that the price could see a rebound within a range-bound cluster in the meantime.
If history is any indicator, price will likely move well below the downside macrotrend and instead reject the Range High resistance (red area). Perhaps even growth will be beyond it, but it will still be much worse than the downtrend itself.
The analyst said a short-term boost in relief is possible as long as current levels remain, but cautioned it could be lost in the coming months before bottoming out at much lower levels.
DOGE price case
Despite the bearish forecast, other market observers shared the more bullish outlook for memecoin. Trader Tardigrade analyst recently signaled that Dogecoin may have already bottomed and was preparing for another bull market.
As you can see in the chart, the cryptocurrency is testing historical support for the third time. This trend line has been in place for about a decade, with retests previously preceding major price increases.
The first touch in 2017 led to a pointed rally towards the 2018 all-time high ATH (ATH) of $0.017, while the second retest in 2021 saw a huge rally towards the current ATH of $0.731.
Now Dogecoin is testing this area again and could start to recover in the tiny to medium term before seeing a massive price expansion to up-to-date highs in the medium to long term if it follows its past performance.
Similarly, the analyst also argued that DOGE’s macro structure remains intact regardless of short-term price action. Last week, he confirmed that memecoin’s behavior during each of the ATH rallies “tells the same story – because Doge makes its own rules.”
He stressed that the cryptocurrency is currently reminiscent of its previous performance on ATH, approaching the end of the falling wedge formation that preceded significant price increases to up-to-date highs during previous rallies.
As a result, he believes Dogecoin is in its “highest quality accumulation window” before potentially heading to the moon.
Featured image from Unsplash.com, chart from TradingView.com
