As Dogecoin (DOGE) retests a key multi-year support, some analysts are predicting a bearish outlook for the largest memecoin by market cap, warning that the bottom may not have been reached yet.
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Dogecoin focuses on lower levels
On Thursday, Dogecoin erased most of its early week bounce and retested the $0.090 area. Market observer Rekt Capital marked DOGE’s recent performance, warning that the price correction may not be over yet.
As he explained, the leading memecoin lost its multi-year macro uptrend in November, closing the month below the rising support that had held since early 2023.
Therefore, Dogecoin officially confirmed its macro downtrend, which started developing after the cycle peak of $0.484 during the late 2024 bull run. The analyst noted that historically, the cryptocurrency has not retested the macro downtrend line until the price is ready to break it and retest it after the breakout.
Based on this, he warned that the memecoin is “unlikely to test this macro downtrend anytime soon.” Currently, DOGE is at a low level, which is also an important reaction zone that previously acted as resistance before turning into support in 2024.
According to Rekt Capital, past bear market performance suggests that Dogecoin is likely to lose the current area as support over time, but noted that the price could see a recovery in the meantime as part of a range-bound cluster.
If history is any indicator, price would likely lag far behind the Macro Downtrend and instead reject Range High (red region) resistance. Maybe even upward, but still significantly behind the downward trend itself.
The analyst concluded that short-term relief remains possible as long as current levels persist, but warned that it could be lost in the coming months before bottoming out at significantly lower levels.
The case for DOGE’s price
Despite the bearish forecast, other market watchers shared a more optimistic view of the memecoin. Analyst Trader Tardigrade recently spotted that Dogecoin may have already bottomed out and could be preparing for its next bull run.
According to the chart, the cryptocurrency is testing historical support for the third time. This trend line has held for about a decade and its retests have previously preceded major price increases.
The first touch in 2017 sparked an explosive rally towards the 2018 $0.017 all-time high (ATH), while the second retest in 2021 was followed by a massive rally towards the current ATH of $0.731.
Now Dogecoin is testing this area again and could start to recover in the short to medium term before a massive price surge to new highs in the medium to long term if it follows past performance.
Similarly, the analyst has also argued that DOGE’s macro structure remains intact regardless of short-term price action. Last week, he confirmed that the memecoin’s performance at each of his ATH meetings “tells the same story – because Doge makes his own rules.”
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He highlighted that the cryptocurrency is currently resembling its previous ATH performance and is nearing the end of the falling wedge pattern that has preceded a significant price increase to new highs during previous rallies.
As a result, he believes Dogecoin is in a “prime accumulation window” before it potentially goes to the moon.
Featured image from Unsplash.com, chart from TradingView.com