The king of meme coins had lost the support level of $0.06 with the recent BTC drop. And it went deeper. Holding meme coins for the long term is much riskier for investors. Levels that Dogecoin (DOGE) investors should also worry about are approaching. So, what is the current situation? Will investors see a recovery after the excessive selling?
The DOGE price has been melting due to miner sales. We saw that the support at $0.06 was lost with the relaxation of the support on the futures side. On the daily chart, the DOGE price traded above the $0.06 horizontal support area since June. The DOGE price also followed a decreasing resistance trend line. When these come together, a descending triangle, which is considered a bearish formation, is formed.
On October 9, the Dogecoin price lost its support zone. Now, the DOGE price is trading within the horizontal area and the decreasing resistance trend line. The critical support level had remained intact for 85 days before the breakdown.
The direction is still uncertain on the daily chart. To see a reversal in the trend and a recovery in the DOGE price, two things are needed. Firstly, we need to see a close above the decreasing resistance trend line. Secondly, it will be confirmed by the RSI rising above the neutral zone again.
If these two important thresholds are surpassed, the DOGE price can target the $0.07 resistance above $0.06. This means an approximate 20% price increase. A price analysis shared by EfloudTheSurfer also suggests a similar view.
The Fibonacci retracement theory suggests that after a significant drop, a deeper bottom could be formed before a recovery. The most suitable level for a potential bottom could be $0.048. Accordingly, the DOGE price forecast indicates that the next support level can be tested unless there are closures above $0.06.
At the time of writing, DOGE is at $0.0586, and for bulls to regain support, BTC needs to make closures above $28,500 to support altcoins. However, BTC is currently at $28,350. Apart from the surprise crypto purchase in Tesla’s balance sheet in the evening, there doesn’t seem to be a short-term trigger that could push the price up.