This chart formation is regarded as a precursor to bullish moves in financial markets

This chart formation is regarded as a precursor to bullish moves in financial markets. The “cup” phase reflects a market attempting to find a bottom

Financial markets often display interesting chart formations, and one such formation is regarded as a precursor to bullish moves. The “cup” phase reflects a market attempting to find a bottom, and the “handle” phase typically represents a brief pullback before the price gathers enough strength to break higher. For DOGE, the crucial level to observe is around $0.16, which could mark the base of this formation.

The trend suggests that if DOGE can break above the $0.29124 resistance level, then it could be a catalyst for a massive price rally. That would be a clear sign of a bull reversal, as a break from a well-defined Cup & Handle pattern tends to yield quick upward momentum.

If there is a breakout above $0.29124, it could propel Dogecoin toward the $0.50–$0.60 range, with the potential for it to reclaim its meme coin dominance if momentum sustains.

Analysts are keenly watching this critical price level, anticipating that DOGE will hit its historical price targets of $0.50 to $0.60 if the breakout occurs. The levels are rife with historical significance and are likely to garner the attention of traders and investors.

While technical analysis points toward a breakout, on-chain metrics present a more conservative view. Whales have been busy accumulating during the price fall of DOGE over the past days, amassing a massive 530 million DOGE.

However, despite this momentum, Dogecoin is still broadly in a downtrend. The token is trading below key technical levels, such as the 200-day Exponential Moving Average (EMA), which indicates that the sentiment of the larger market is still bearish.

Moreover, DOGE’s open interest (OI) has declined substantially from $5.25 billion to $1.79 billion, indicating lower trader interest. This suggests that most investors are either exiting DOGE or prefer to wait for a more defined trend to engage in the market.

As Dogecoin’s price falls further, it now has crucial support at $0.20, which is serving as an important floor for the coin. The level has become critical following a 50% decline from DOGE’s Q4 high. The challenge for DOGE is whether it can hold this support or if a deeper correction is imminent. If the price fails to stay above $0.20, another fall can be expected, which may test lower levels.

Another factor to consider is network growth, which will be crucial for DOGE to maintain its support level of $0.20. The latest figures show a sharp drop in the opening of new DOGE addresses, with new wallets decreasing from 1.29 million in November to just 31,000 recently. Such a decline in network activity implies that the demand for DOGE is decreasing, which may hinder its short-term recovery.

If this trend continues, bearish pressure will likely lead to additional selling and a breach of the $0.20 support level.

Market sentiment has been bearish on Dogecoin, as evidenced by a steep decline in meme coin prices across the board. The meme universe has lost $15 billion in total value over the past week, with DOGE bearing the brunt of the losses at $8 billion. This broader market pullback has put additional pressure on DOGE, making it more difficult for the asset to stage a recovery.

While the broader crypto market remains volatile, DOGE’s ability to maintain its price floors will be influenced by internal dynamics and external market forces.

One positive development is that Elon Musk’s DOGE program is beginning to have an impact in the U.S., aiming to save taxpayer money and win over the American people.

Dogecoin (DOGE) price was holding at $0.20 support, down 4.74% in the last 24 hours at press time.

Dogecoin’s future price direction will largely depend on a combination of factors such as whale activity, technicals, and overall sentiment. Although the Cup & Handle pattern suggests a bull run, declining demand and decreasing market participation could spoil the rally. A deeper correction is in store if DOGE fails to hold key support prices or if overall sentiment continues to deteriorate. Traders will need to keep a close eye on the $0.20 level and network activity to anticipate DOGE’s next move.