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Dogecoin (DOGE) has entered a period of weakness and is down around 16% from its November 23 local high of $0.4795. While the original meme cryptocurrency is struggling to regain key technical levels, the consensus among some analysts is that DOGE’s ability to stabilize or recover may be almost entirely dependent on an external factor: Bitcoin’s trajectory.
Dogecoin price threatens to fall again
Technical analysis shows that the previously respected uptrend line, established in mid-November, has now become a formidable barrier. After breaking this support line earlier this week, Dogecoin bulls attempted to push the price back above it several times. Yet none of these attempts have been successful.
Crypto analyst Kevin (@Kev_Capital_TA), who has been closely watching the DOGE/USD 1-day chart, notes that DOGE “is being rejected on the retest of this trendline that we’ve been holding for almost a month, plus it’s right in the macro. 786 Fib.” – a technical zone often associated with major turning points and potential reversals.
Beyond the trendline, internal momentum indicators paint a challenging picture. Kevin highlights that the daily MACD for DOGE is showing “strong downward momentum,” a technical signal that suggests market bias could turn lower in the short to medium term unless the broader crypto environment changes.
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According to him, it is safe to say that without a rise in BTC, the more likely move for DOGE will be lower in the short to medium term. However, a higher BTC price could save us.” He identifies $0.32 – the origin of the prior uptrend line – as a primary downside target. Should DOGE fail to hold above that level, traders could look to the $0.29 to $0.26 range as a potential next stop.
In another post on X, Kevin highlighted that Dogecoin’s price was between two critical long-term Fibonacci levels. He describes that DOGE is currently “trading between the macro golden pocket,” roughly $0.47, and the macro 0.5 Fib level near $0.39. According to him, a solid break above or below these crucial levels could lead to what he calls a “cascading” effect of “aggressive moves.”
He adds: “My position is that DOGE is not in control of itself and its fate is currently completely in the hands of BTC, so an over-focus on the asset is kind of a waste of time. I don’t see anything telling me the cycle is over, therefore this should move higher soon enough regardless of the short term noise. There is nothing to do but sit back and wait if you are a long-term holder who started early like me.”
However, there is at least one silver lining worth mentioning. Kevin mentions that he “follows [a] potential hidden bullish divergence” on the DOGE daily chart. Hidden bullish divergences occur when price action continues to trend higher over an extended period of time, while momentum indicators – such as the Relative Strength Index (RSI) – trend lower.
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This pattern can sometimes indicate that the underlying strength of a market is greater than it seems. It is, as the analyst puts it, “pretty textbook” at this point, though it still needs some all-important help from Bitcoin. “BTC still has to cooperate, so nothing is guaranteed,” Kevin notes.
What about Bitcoin?
Kevin points out that Bitcoin is currently “squeezing” between an uptrend line of support and a macro golden pocket – levels derived from the previous bull market high to bear market low. This tightening price action signals an impending resolution: BTC is unlikely to remain compressed in this zone for much longer. A decisive outbreak, in any direction, appears imminent and could have far-reaching consequences. “This upward consolidation cannot last much longer. We will have an outage in both directions very soon,” Kevin predicts.
On the liquidity front, Kevin sees significant upside liquidity blocks for BTC, noting that the “liquidity built up” over the past 48 hours matches the macro level of 1,703 Fibonacci. He also cites observational data showing whales are buying big options and asking for MicroStrategy (MSTR) stock. Such purchases may reflect expectations of a rise in BTC, given MicroStrategy’s known Bitcoin treasury holdings. If these whales and liquidity indicators are correct, and BTC does indeed move higher, DOGE could find the “one lifeline” it needs to stabilize and reverse the current downtrend.
At the time of writing, DOGE was trading at $0.405.
Featured image created with DALL.E, chart from TradingView.com