Dogecoin price has been experiencing heavy volatility in recent days

The price decline comes as Dogecoin broke below a long-standing ascending parallel channel that had guided its price action

Dogecoin price has been experiencing heavy volatility in recent days, with technical indicators suggesting that the popular meme cryptocurrency might be heading toward a major price correction in the coming weeks.

Dogecoin price dropped by 22% from Saturday’s high of $0.171 as technical indicators suggest that a major price correction might be in store for the popular memecoin in the coming weeks.

Dogecoin broke below a long-standing ascending parallel channel that had guided its price action since 2018. This breach marks a notable technical shift in DOGE’s market structure.

According to technical analysts, the loss of this key trendline support suggests growing bearish momentum. The breakdown coincides with rejection at the 0.786 Fibonacci retracement level, located at approximately $0.16395.

The next major support level for Dogecoin lies at the 0.618 Fibonacci retracement, which is around $0.06167. This level aligns with previous consolidation zones, making it an important focus point for traders.

Amidst market uncertainty, a whale has transferred 300 million Dogecoin, valued at around $41.7 million, to the Binance exchange. Such large-scale transfers often precede selling pressure or major position adjustments.

However, crypto trader Trader Tardigrade points out a bullish divergence on Dogecoin’s daily chart. This pattern emerges when price moves lower while the Relative Strength Index (RSI) bounces and posts higher lows. The divergence suggests selling momentum may be weakening, potentially indicating a price reversal.

Dogecoin is currently testing the $0.135 price level, which has acted as both support and resistance in the past. This level held firm throughout a consolidation phase in early 2023, and the current price action may present a reversal pattern.

Some analysts believe that if Dogecoin can sustain these support levels, there’s a possibility that DOGE price may recover and eventually reach higher targets.

“If the price bounces from this level, we are likely to see the start of a new bull trend,” one analyst commented. However, they cautioned that if support fails, further downside movement could test $0.12 or even $0.10.

On-chain metrics paint a concerning picture for Dogecoin’s short-term prospects. Daily active addresses have fallen toward levels maintained since January, after seeing a major uptick in November.

Social media engagement around DOGE has also been declining. The social dominance trend has been falling, with April setting new lows in social volume. This suggests that unless the price trend changes direction, attention and capital flows will continue to leave the market.

The funding rate has moved into negative figures after a week of efforts from bulls. This highlights favorable conditions for sellers in the derivatives market.

On the technical side, the one-day Dogecoin chart shows steady selling pressure since December, with the On-Balance Volume indicator slowly but steadily falling. The RSI has remained below the neutral 50 level since mid-January, indicating an ongoing bearish trend.

The $0.131 and $0.102 support levels from October 2024 are now the next price targets. The former has been tested in recent hours and could yield a bounce to the $0.154-$0.164 range.

Despite the potential for a 15% short-term bounce, the overall trend remains firmly bearish in the near term, according to market analysts.

Some market participants suggest watching for a reclaiming of the $0.18 level as a sign of a possible fakeout or short-term recovery. If Dogecoin can flip this level and close above it, further resistance levels would be set at $0.25 and $0.30.

However, if the price fails to break through the key levels at $0.18 and $0.20, the memecoin may experience a continued slowdown in its recovery attempts.

The most recent liquidation data shows $37.15 million worth of DOGE positions were liquidated across all exchanges, with $31.87 million (85.78%) being long positions.

Dogecoin’s price slide of 22.6% in 24 hours came as Bitcoin shed 10.68% of its value after panic spread across global markets due to trade war developments.