Dogecoin at a Crossroads: Key Support Retest After 8.6% Plunge – Critical Levels Revealed
Dogecoin's latest price action has traders on edge as the meme coin battles a make-or-break support level.
After shedding 8.6% of its value, DOGE now faces a crucial technical test that could determine its near-term trajectory. The charts are flashing warning signs – but also potential opportunities for savvy traders.
The support showdown
All eyes are on Dogecoin's current price floor, which has held through three previous tests this quarter. Another bounce here would confirm strong accumulation, while a breakdown could trigger cascading liquidations.
Where bulls and bears collide
The next resistance levels loom overhead like a crypto version of the Sword of Damocles. Meanwhile, derivatives data shows perpetual funding rates flipping negative – typically a precursor to increased volatility.
As always with meme coins, fundamentals take a backseat to technicals and market sentiment (not that DOGE ever had much fundamentals to begin with). The coming days will show whether this is another 'buy the dip' moment or the start of something more sinister.
Dogecoin Retests Breakout Levels
On Wednesday, Dogecoin momentum saw a momentary pause as Bitcoin and most of the market’s rally slowed down. The leading memecoin has recorded a massive run over the past week, increasing over 25% in the last seven days.
At the start of the month, DOGE recovered from the June pullback and climbed to the $0.20 level for the first time since May. After reclaiming this crucial level mid-July, the cryptocurrency consolidated around this area, building a base before resuming its bullish run last Wednesday.
Over the weekend, dogecoin broke out of the $0.23-$0.24 resistance, soaring past the May highs to hit the $0.28 area on Monday. The token near this level on Tuesday, hovering between the $0.26-$0.27 price range.
However, today’s pullback saw the memecoin drop approximately 9% in the daily timeframe and retest its breakout level around the $0.23 mark. Despite the correction, crypto analyst Kaleo affirmed that “If you’re not stacking Dogecoin on the retest of this breakout, you’re wrong.”
The analyst highlighted that the token is repeating its Q4 2024 performance, when it retested its breakout level as support before starting the explosive rise to its multi-year high of $0.48.
Amid the retracement, Ali Martinez also asserted that Doge is retesting the neckline of its double bottom pattern, situated around the $0.25 mark. To the analyst, “This is a key support zone that could offer a solid entry point before the next leg up.”
Notably, he previously suggested that as long as the token holds this area as support, a rally toward the $0.33-$0.40 is likely, adding that the next major resistance barrier is at $0.36.
DOGE Weekly And Monthly To Determine Next Move
Rekt Capital noted that Dogecoin has successfully retested its multi-year technical uptrend as support, which enabled its rally to the upside. He explained that price is currently “pressing beyond its pre-halving highs,” around the $0.22 level.
A monthly close above this area would position Dogecoin price for a post-breakout retest of this level as support in August. The analyst highlighted that DOGE’s Pre-Bitcoin halving levels are confluent with the neckline of the double bottom pattern recorded in the Weekly chart.
Rekt Capital explained that “any dips on the Weekly timeframe into the ~$0.22 region would figure a post-breakout retest attempt of the Double Bottom to fully confirm a breakout, whereas on the Monthly any dips would figure as a key technical milestone to finally turn Pre-Halving highs into new support.”
Nonetheless, Dogecoin’s re-challenge of the $0.27 resistance depends on the success of the ongoing retests, as it would signal that this area is weakening as a rejection point and making a reclaim more likely during the next attempt.
As of this writing, Dogecoin is trading at $0.24, a 54% increase in the monthly timeframe.
