Dogecoin faces a confusing technical setup as technical analysis warns of a big move on a higher time frame that could send DOGE into a deeper accumulation zone first. The chart appears bearish at first glance, but the inverted price scale changes the value, turning the expected decline into a longer term bullish stance that points to $1, $2 and finally $5.
Dogecoin is approaching its smart money zone
Technical analysis done by a crypto analyst known as Crypto Patel built around the idea that Dogecoin could still need to push lower before the larger upward cycle begins. Crypto Patel’s three-week DOGE/USD chart on TradingView spans more than a decade, from 2014 to a projected 2028, and shows repetitive price action. The most important detail, however, is that the chart has been inverted for emphasis, meaning the bearish-looking projection actually points to a long-term bullish move.
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The chart shows Dogecoin in a declining channel that has determined its price for years. The first major phase started with a rejection at the upper trendline before the 2017 cycle, followed by a big move that eventually gave way to another long correction. A second major base formed around early 2021, later leading to Dogecoin’s explosive run during the last meme coin mania.
Crypto Patel appears to be comparing the current structure to those earlier phases. The third setup on the map is currently developing where Dogecoin looks like it is declining on the upper trendline of the descending channel.
What’s next for Dogecoin?
The highlighted rejection zone around the current area shows that Dogecoin price could still return to a low of $0.07 in the accumulation range for a bottom before a strong reversal on a higher time frame. According to Crypto Patel, retail traders will sell the bottom but smart money traders are already setting up alerts.
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Interestingly, on-chain data supports this idea of smart money movements and whales accumulating Dogecoin. Recent chain data in early May shows that Dogecoin whales recently recorded their busiest day in six months, and most of this activity consists of accumulation moves.
If Dogecoin breaks below the current range without strong demand in the spot market, this move could drag the price even deeper into Crypto Patel’s accumulation band of $0.10 to $0.07. However, the projection shows Dogecoin price reversing around the accumulation band and beginning a rally, with the analyst pointing to targets of $1, $2, and $5.
Crypto Patel’s $1, $2 and $5 targets are very optimistic, especially since Dogecoin is down 85% from its 2021 all-time high of $0.7316.
At the time of writing, Dogecoin is trading at $0.109. The first major checkpoint would confirm daily and closes weekly above $0.10, reclaiming higher resistance levels around $0.15 to $0.20, confirming that the current structure has left a long correction phase.
Featured image from Getty Images, chart from Tradingview.com