Dogecoin price is currently exhibiting a very bearish chart pattern on a 4-hour time frame, signaling potential caution for investors. After forming a bullish descending wedge pattern between November 12 and 19, the expected breakout was short-lived and did not meet bullish expectations.
On November 19, Dogecoin broke out of the formation, arousing initial optimism among traders. However, crypto analyst Kevin (@Kev_Capital_TA) had predicted the breakout would be small and subsequent price movements would validate his predictions.
Where does Dogecoin price go next?
The memecoin faced a sharp rejection at an important resistance level, particularly the 0.786 Fibonacci macro retracement level. Kevin emphasized that as long as this level isn’t “broken cleanly and violently, it’s okay to get too crazy.” He also pointed out that Bitcoin (BTC) is encountering major resistance, suggesting that Dogecoin’s next big move will likely coincide with Bitcoin crosses the $100,000 mark. “In the meantime, everything will move,” he noted.
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Urging traders to temper their enthusiasm, Kevin said: “Please control your enthusiasm as there is nothing in the short term that can get you excited. BTC still finds itself at major resistance, as does Dogecoin. Nothing is broken yet. He highlighted the importance of Bitcoin’s movements, adding: “It is currently more important to provide technical analysis on BTC than on Dogecoin. DOGE is simply trading sideways, waiting for Bitcoin to make a move up or down. Where Bitcoin goes, Doge will go in the short term.
Analyzing the 4-hour chart, Kevin identified a “nasty triple top” at the 0.786 Fibonacci macro level for Dogecoin – a bearish signal that could indicate upcoming downward pressure. He warned that if a correction to $0.30 occurs, as he previously suggested, “many blind perma bulls will have to explain themselves.”
A triple top is a bearish reversal pattern in technical analysis that signifies a potential shift from an uptrend to a downtrend. This occurs when the price hits the same resistance level three times, retreating each time after failing to break through the level. Dogecoin’s repeated failure to break above the $0.786 Fib to $0.41 suggests weakening near-term bullish momentum.
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Kevin pointed out that Dogecoin hasn’t really broken out yet: “Until it cleanly crosses the macro .786 Fib at $0.41, it’s just trading sideways.” Looking ahead, he outlined a bullish scenario conditional on surpassing this key resistance level. “If Dogecoin breaks this macro .786 Fib forcefully, then $0.80 to $0.85 is on the table. Lots of work to do though. BTC needs to push higher,” he explained.
For several days, Kevin has been predicting a deeper correction for Dogecoin. The formation of the triple top and the rejection at the 0.786 Fibonacci level support its main hypothesis. He exposed his initials price target: “One level we will want to maintain for Dogecoin is the $0.30 to $0.26 range, which corresponds to gold pocket retrace levels. This represents a 30-40% correction from the local high, which in a bull market is a perfect size correction.
Focus on the longer term perspectiveKevin highlighted the importance of the upcoming monthly candle close. “Dogecoin’s next big goal is to close an 11-day monthly candle above $0.335. This would make DOGE the highest monthly close ever, and I will keep a close eye on this,” he said.
At press time, DOGE was trading at $0.39.
Featured image created with DALL.E, chart from TradingView.com