Dogecoin (DOGE) Eyes All-Time Highs After Recovery, Key Takeaways

Dogecoin's latest price correction may look concerning, but historical data suggests it's a necessary step before a massive surge.

Dogecoin (DOGE) price is pulling back from its recent highs, but some crypto traders believe that this could be a necessary step before another massive surge.

Dogecoin price dropped sharply in recent weeks, but key indicators are now suggesting a reversal from the lower support. This could lead to another leg up in the meme coin’s price rally.

After a record-breaking rally in 2023, Dogecoin price has been consolidating gains and pulling back from the upper levels of a bullish channel. This price action has seen DOGE drop by as much as 20% from recent highs. However, key technical indicators are now suggesting that the meme coin is due for a reversal.

A closer look at DOGE’s price chart shows that the recent dip has seen the meme coin touch the lower boundary of a two-month Channel Down. This pattern, when observed on a higher timeframe, also resembles a Giant Bull Flag, a formation that usually forms in preparation for a strong rally.

Confirming this bullish setup are some key technical cues. For instance, Dogecoin recently touched its 1D Moving Average 200 (MA200), a level that has played a crucial role in the past, preceding price rallies. At the same time, the 1D Relative Strength Index (RSI) moved into the oversold zone, suggesting that any sell pressure may have been exhausted.

These cues are setting up DOGE for another breakout in the pipeline. A trading target has been set by TradingShot at $0.38, which is below the 0.786 level of its Fibonacci retracement, and is shaped like its previous bullish leg. This could mark the beginning of another major bull run for Dogecoin.

Dogecoin price rallied significantly in the first half of 2023, rising from lows around $0.07 to highs of $0.23. This impressive rally saw DOGE climb by over 200%, outpacing most other cryptocurrencies in the market.

However, the meme coin’s price has struggled to maintain momentum in recent weeks, leading to a sell-off that saw DOGE drop to lows of $0.16. This price action has now seen Dogecoin pull back by roughly 30% from its recent highs.

Despite the recent sell-off, market sentiment for Dogecoin remains bullish. This is largely due to the meme coin’s impressive performance in the first half of the year, which has left many traders optimistic about its future prospects.

Moreover, several technical indicators are now suggesting that DOGE is due for a reversal from its lower support. This could pave the way for another leg up in Dogecoin’s price rally.