Dogecoin (DOGE) has been in a short-term downtrend for the past two weeks, shedding over 29% of its value since hitting a local high on January 18. The meme coin has faced consistent selling pressure, mirroring broader market uncertainty. However, this downtrend may be nearing its end as DOGE approaches key demand levels that have historically supported price recoveries.
Top analyst Scient shared a technical analysis on X, highlighting that Dogecoin is setting up for a massive leg higher. According to Scient, DOGE is currently consolidating above the 1-day support level while also finding strong support at the 1-day 100 EMA. This signals a potential reversal as buying pressure starts to build at these critical levels.
If Dogecoin manages to hold this support and push higher, it could signal the start of a fresh rally, with traders eyeing the next key resistance levels. A confirmed breakout from this consolidation phase would likely drive renewed bullish momentum and attract more investors back into the market.
Dogecoin Holds Above Key Demand
Dogecoin is trading at a key demand level around $0.32, and the next few days will be crucial in determining its short-term direction. Market sentiment remains volatile, with many analysts calling for a further decline as uncertainty grips the broader crypto market. The downtrend that started on January 18 has put pressure on DOGE, and traders are watching closely to see whether it can hold its current levels or break lower.
Despite the bearish sentiment, top analyst Scient shared a technical analysis on X suggesting that Dogecoin may be gearing up for a massive rally. According to Scient, DOGE is currently consolidating above the 1-day support while also finding strong support at the 1-day 100 EMA. These levels have historically been key turning points for Dogecoin, and their ability to hold could indicate that buyers are stepping back in.
Scient also pointed out that lower support levels exist, with strong lows at $0.262 coinciding with the 1-day 200 EMA. These zones, according to Scient, present good opportunities for spot accumulation. He remains bullish as long as DOGE holds above these levels, cautioning that a close below the 1-day 200 EMA would be the only truly bearish signal.
For now, Dogecoin remains at a pivotal point. If it maintains support and breaks higher, a strong rally could follow. However, if the price fails to hold key levels, further downside could be on the horizon. Investors and traders are closely monitoring whether this consolidation phase will turn into the next major uptrend for DOGE.
Price Action Details: Critical Levels
Dogecoin is currently trading at $0.32 after experiencing days of selling pressure and negative market sentiment. The meme coin has struggled to regain bullish momentum since its sharp decline from the January 18 high of $0.43. Now, DOGE is at a crucial level, and bulls must step in to prevent further downside.
For DOGE to stay in a strong position, the price must hold above the $0.30 mark. This psychological level has acted as a key demand zone in the past, and losing it could lead to a sharper correction. If bulls manage to maintain support at this level, the next major challenge will be reclaiming $0.35. A breakout above this resistance could reignite bullish momentum and set the stage for a strong recovery.
However, failure to defend the $0.30 level could expose Dogecoin to further declines. In this case, the next major demand zone sits around $0.25, representing a 20% drop from current levels. This level also coincides with the 1-day 200 EMA, which has historically acted as strong support. If DOGE drops that low, it will likely trigger increased accumulation, but for now, all eyes remain on its ability to hold above $0.30.
Featured image from Dall-E, chart from TradingView
Source: NewsBTC