Dogecoin Eyes Breakout From $0.18 Base as Analyst Predicts Potential 2x Rally

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Dogecoin is defending its ground above the critical $0.1869 level, sparking renewed interest among bullish traders. Despite last week’s dip of nearly 16.37%, the meme coin has stabilised around the 23.60% Fibonacci retracement zone, suggesting a potential recovery path, one that could even push prices toward $0.50 in the coming weeks.

With the broader altcoin market showing signs of weakness, Dogecoin’s resilience has become a focal point for analysts watching for early trend reversals.

DOGE Tests Key Fibonacci Support Level

Currently trading at $0.19, Dogecoin has corrected from its previous highs but is finding crucial support at the 23.60% Fibonacci retracement level, situated at $0.1869. This zone has proven critical in past price action, especially as DOGE recently failed to break above the long-standing resistance near $0.25, which aligns with the 50% Fibonacci level.

Technical indicators reveal that Dogecoin’s price has dropped below its 50-day, 100-day, and 200-day EMAs, a move that typically confirms bearish control. However, long-tailed candlesticks forming over the weekend suggest that buyers are still protecting the support zone.

MACD Signals Bearish Pressure, Yet Possibility of Rebound Remains

The MACD and signal lines have now formed a bearish crossover, edging closer to the midline. This crossover indicates increasing selling momentum, which could lead to a deeper correction if it continues.

Adding to the caution, the 50-day and 100-day EMAs are trending downward, delaying any chances of a bullish crossover. Nevertheless, price action suggests that if Dogecoin maintains its position above $0.1869, a cup-and-handle pattern may still develop, a classic bullish reversal formation.

For this pattern to play out, Dogecoin must break above its resistance trendline and retest the $0.25 supply zone. If successful, the rally could extend toward the 78.60% Fibonacci level at $0.3618, and potentially even challenge the psychological barrier at $0.50.

Risk of Breakdown Still Looms

While the bulls hold the line for now, a daily close below $0.1869 could signal a bearish continuation. If support fails, Dogecoin’s next stop may be the $0.14 region, a level that served as a strong base in previous cycles.

Therefore, this week could prove pivotal. Price action near $0.1869 will determine whether DOGE gears up for a breakout or slips into deeper consolidation territory.

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Derivatives Market Paints a Neutral Picture

Despite the recent decline, the Dogecoin derivatives market remains relatively stable. Open interest has held steady at $2.05 billion, and the long-to-short ratio sits at 0.9972, showing a near-even battle between bulls and bears.

However, liquidation trends reveal a slight bearish lean. Long liquidations spiked to $2.44 million, outpacing $1.77 million in short liquidations. This discrepancy suggests that bullish traders experienced more liquidations during the drop, indicating a loss of confidence.

Yet, there’s a silver lining: Dogecoin’s funding rate surged to 0.0069%, signalling renewed optimism among leveraged traders. This uptick supports the idea of a potential recovery, especially if short-term buyers step in to defend the current support.

Analyst Sees 2x Rally as Parabolic Pattern Emerges

Crypto analyst Tardigrade has reignited bullish hopes with a bold prediction. According to his analysis, Dogecoin is completing a base-three formation within a parabolic step-like curve. This structure, often seen in previous meme coin rallies, suggests that DOGE could soon break out with strong momentum.

Tardigrade believes that this breakout could produce a 2x return, with Dogecoin targeting levels beyond the $0.50 psychological zone, a price not seen since the early 2021 mania.