Dogecoin (DOGE) Price Analysis: Despite the Sudden Crash, Support at Lower Levels and Historical Price Movements Suggest Significant Upside Potential

As crypto market valuations drop to $3 trillion, the meme coin segment has seen a massive decline of 17.29%. The meme token market capitalization is now down to $69.36 billion, with Dogecoin (DOGE) experiencing a 16.75% drop.

Despite the recent market downturn, several indicators suggest that Dogecoin (CRYPTO: DOGE) could still experience significant upside potential in the coming months or quarters.

Here are a few observations that support this view:

1. Strong Support at $0.20:

Dogecoin's price action on the daily chart shows three consecutive bearish candles, including a 12.94% drop yesterday, forming a bearish engulfing candle. However, intraday price movements indicate a strong lower price rejection after hitting a 24-hour low at the $0.20 psychological mark.

Currently, the intraday candle shows a 5.75% rise from the lowest point, with DOGE trading below the 200-day EMA line. Despite the bearish pressure, Dogecoin's sustained dominance above the 50% Fibonacci level at $0.24799 could be a crucial factor.

The short-term outlook suggests a potential bearish crossover among the moving averages as the bearish pressure intensifies. However, the stochastic indicator hints at a bullish comeback, considering the lower price rejection and strong support at lower levels.

The intraday candle shows a positive crossover of the stochastic lines in the oversold region, projecting a potential return as bearish exhaustion sets in.

2. Fibonacci Price Targets:

If Dogecoin's price action manages to reverse and experience a bullish rally, the Fibonacci retracement levels could provide potential price targets.

Based on the recent swing high and low, the 23.6% Fibonacci level is at $0.288, which could be the first resistance zone. Further up, the 38.2% Fibonacci level is at $0.3565, presenting another price target if the rally continues.

On the downside, support remains strong at the $0.20 psychological zone, followed by the 61.8% Fibonacci level at $0.178, which could act as a crucial support area if the price drops further.

3. Historical Price Movements:

A recent post on X by trader Tardigrade highlights the historical pullbacks in Dogecoin, offering an interesting perspective on its potential trajectory.

According to the trader's analysis, each time Dogecoin has experienced a significant rally, it has also undergone substantial pullbacks, followed by periods of consolidation.

For instance, in 2016, DOGE went through a 59.76% pullback, which was succeeded by a massive bullish rally of 9,221%. Later, in 2020, DOGE witnessed a nearly 56.2% pullback, and it was eventually succeeded by a bullish surge of 30,693%.

With the ongoing bearish performance, Tardigrade's suggestion is, "When in doubt, check the macro chart." This statement reflects the trader's optimism about Dogecoin's future and their projection of a bullish comeback, with potential price targets that could exceed the $2 psychological milestone.