Dogecoin was yet another victim of a broader market correction after retracing nearly half of its 60% jump from $0.1365-$0.215 seen last week. DOGE’s value was now parked at the 38.2% Fibonacci level and a host of support zones were available at its disposal. Once selling pressure is quelled at these defenses, DOGE was expected to board a massive rally which could peak by 100% over the next few weeks.
Dogecoin 4-hour time frame
Dogecoin’s immediate defenses were present at the 38.2% and 23.6% Fibonacci levels – both of which have triggered mini-rallies during December. In fact, interest for DOGE stretches all the way to $0.0136 and a deeper sell-off was unlikely, especially after bulls flipped a key resistance trendline to support on 13 January.
During the next wave upwards, investors must see how DOGE interacts at the 61.8% Fibonacci and $0.196-resistance levels. A close above these zones on good buy volumes would set up a triple top at $0.221. If buyers can cope with this bearish pattern with minimal damage, expect DOGE to tackle $0.273 and force a comeback towards the coveted supply zone between $0.33-$0.35.
Overall, the projected hike from DOGE’s press time value to its supply zone would account for a near 100% increase. Naturally, such gains would be difficult in a weak broader market, and Bitcoin’s reassurance above $45K would alleviate a ton of selling pressure for DOGE as well.
Meanwhile, a lower below $0.1365 would severely damage a favorable outlook. In such a case, DOGE would likely continue within a larger downtrend and disregard any optimism that came from its last rally.
Bulls were finding their footing as per the 4-hour indicators. The Squeeze Momentum Indicator’s red bars declined in length as downwards pressure was offset by new buy orders. The first blue dot would even present an early buy signal.
Furthermore, the Stochastic RSI was attempting a U-turn after trading in the oversold territory for three days. Its current reading was still attractive for those looking to bag DOGE at a discounted price level.
Dogecoin has laid the groundwork for a recovery. A close above some important regions would gift investors and other meme coins with massive gains. However, keep in mind that a favorable outlook would largely depend on the general condition of Bitcoin.