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Dogecoin Price Plummets 40%: History Repeats, But What Lies Ahead for DOGE?

Last Updated March 19, 2024 3:29 PM
Valdrin Tahiri
Last Updated March 19, 2024 3:29 PM
By Valdrin Tahiri
Verified by Peter Henn

Key Takeaways

  • The Dogecoin price has fallen by 40% since its local high of $0.206 on March 5.
  • Dogecoin experienced three significant downturns during the 2020/21 market cycle.
  • Will the Dogecoin price act in a similar way as it did after the previous corrections?

Dogecoin’s price took a significant tumble recently, falling 40% from a high of $0.206. Comparing this correction to previous cycle reveals intriguing insights. While the correction is notable, it is shallower than those experienced during the previous market cycle.

As DOGE attempts to bounce and salvage an important support level, this week’s movement can be critical in determining if the Dogecoin price has bottomed, or if the correction will deepen further toward $0.105?

How Does Dogecoin’s Drop Compare to Previous Cycles?

The DOGE price has fallen in the two weeks since reaching a high of $0.206 (red icon). March 19’s low of $0.125 amounts to a decrease of 40%. This is the deepest correction since the bullish cycle started in September 2023. Before, DOGE experienced a 32% drop that continued for 56 days.

Dogecoin Price Sharp Drop
DOGE/USD Weekly Chart: Credit – TradingView

In the bullish cycle between March 2020 and April 2021, the DOGE price suffered three major corrections, all between 50% and 60% in magnitude. While the first correction lasted nearly four months, the other two were much shorter and retraced in a matter of weeks.

Since the DOGE price has already completed a drawn-out correction in the current cycle, it is possible that the ongoing and future ones will not be lengthy.

DOGE Price Prediction: Where Will the Price Bottom?

The daily time frame technical analysis gives mixed readings. The wave count suggests that DOGE is likely in wave four of a five-wave upward movement. If the count is correct, the DOGE price will bounce at the current level of $0.125.

There is confluence in the form of the 0.618 Fibonacci retracement support level and the resistance trend line of an ascending parallel channel. A decrease below the wave one high of $0.106 (red line) will invalidate the count.

DOGE Price Correction Complete?
DOGE/USD Daily Chart: Credit – TradingView

The daily RSI is at a critical level. The indicator could fall below 50 (red circle), a sign of a bearish Dogecoin price trend. However, the daily close is important in determining if the RSI will do so, or if it will bounce instead, similar to how it did in November 2023 (green icon)

The invalidation level of $0.106 amounts to a 48% drop from the high. So, if the count is correct, this cycle’s corrections will not be deeper than 50%, unlike the previous one.

Dogecoin Trades at Make-Or-Break Level

To conclude, the DOGE price trades at a critical level that can help determine the trajectory of its future trend. A strong bounce and reversal at the $0.125 level will be a sign that the upward movement will continue. Conversely, if DOGE  fails to bounce and the daily RSI closes below 50, it can be a sign that the correction will be deeper, similar to what happened in 2020/21.

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