Following the broader crypto market decline, Dogecoin (DOGE) has crashed to a new lowand sends it back to a key demand zone. Market analyst Eric Crypto has shared a detailed analysis, highlighting the importance of this level and predicting that a hold above it could be possible cause a big rebound and subsequent price increases for Dogecoin.
Dogecoin price drops to the main demand zone
On January 31, Eric Crypto shared a technical price chart on The move was accompanied by choppy price action and several volatility spikes before sellers finally pushed the price into a clear support area.
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After this drop, Eric Crypto noted that Dogecoin is now right on the market main demand zone almost $0.11. He explained that the price briefly fell below recent lows to gain liquidity before forming a visible base in this region. On the chart this looks like a small consolidation box just above $0.11 after the sharp decline.
Now that price action is stabilizing at the base, Eric Crypto believes Dogecoin is positioned for a potential price increase. He noted that if the meme coin can stay above the demand zone, it could signal a relief rally to $0.14, which could be the next step. Should bullish momentum continue, he added that higher targets around $0.18 and possibly $0.22 could come into play.
Since the price of Dogecoin has fallen to $0.103, an increase to $0.14 would mean a gain of 36%. Furthermore, a rally to $0.18 and $0.22 would reflect a potential upside of around 75% and 114%, respectively.
Eric Crypto concluded his analysis by characterizing Dogecoin’s current setup as one where “the risk is defined” and “the upside is asymmetric.” The analyst also urged investors to be patient as Dogecoin navigates a long-term downward trend and strives for recovery.
Analyst says Dogecoin looks weak but can still recover
In an updated analysis, crypto expert Bitguru says said that Dogecoin is currently trading within a long consolidation zone around $0.10, after a sharp drop from $0.24 and a subsequent liquidity clearing. He acknowledged that Dogecoin’s price seems weak at the moment, indicating that the selling pressure continues.
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Despite this downtrend, Bitguru noted that maintaining the current consolidation base could spark a recovery for Dogecoin. According to the analyst, the dog-themed meme coin could provide support begin a recovery towards the $0.13-$0.15 range.
On the other hand, the analyst warned that a breakdown below this support level could negate Dogecoin’s potential recovery. If this happens, he has stated so DOGE’s downside risk would remain open, meaning the price could slide back to lower levels.
Featured image of Pngtree, chart from Tradingview.com