Dogecoin Correction: How Low Could It Go Before Rallying Again?
Dogecoin’s Recent Rally and Potential Correction
\n
Dogecoin (DOGE) recently experienced a remarkable surge, soaring nearly 200% within eight days, reaching a peak of $0.4385 on Tuesday. This explosive growth pushed the daily Relative Strength Index (RSI) to an overbought level of 93. Since then, the Dogecoin price has pulled back by 19%, trading around $0.37 at the time of writing.
\n
However, renowned crypto analyst Kevin (@Kev_Capital_TA) believes the correction might not be over yet. In a series of updates on X, he shared his insights on how low Dogecoin could go before resuming its upward trajectory.
\n
Kevin’s Analysis and Price Targets
\n
According to Kevin, a correction to the $0.30-$0.26 range, representing a 30-40% drop from the recent peak, would be a healthy adjustment in a bull market. This zone aligns with the golden pocket retracement levels.
\n
Kevin emphasizes the importance of RSI levels in predicting market movements. He suggests a consolidation period to cool off indicators would be beneficial for Dogecoin, referencing similar occurrences during the 2020-2021 bull run.
\n
Based on the current technical data, Kevin believes a correction is likely to occur soon. He points out that Dogecoin hit the 90+ level on the daily RSI three times during the 2020-2021 bull market, each time marking a local top or consolidation phase before a further rally.
\n
Symmetrical Triangle and Price Targets
\n
Looking at lower time frames, Dogecoin has formed a symmetrical triangle, a pattern often associated with consolidation before significant price movements. While this pattern could indicate either a continuation or reversal, Kevin leans towards a correction due to the overbought RSI levels.
\n
By measuring the height of the triangle’s base, traders can estimate the potential magnitude of the price drop. Applying this method to Dogecoin suggests a correction towards the $0.28 level, aligning with Kevin’s analysis targeting the $0.30-$0.26 range.
\n
Conclusion: Healthy Correction or Further Downward Movement?
\n
While Dogecoin has already retraced about 19% from its peak, the daily RSI is still in overbought territory at 80, leaving room for a potential continuation of the correction. A move below the $0.35 support level could signal further downward momentum.
\n
Kevin reiterates his belief that a healthy consolidation would be beneficial for Dogecoin. He concludes that a 1-3 week correction would allow indicators to cool off, paving the way for a potential rebound.