The entire cryptocurrency market has been affected by a significant drop in the past 24 hours, led by Bitcoin once again breaking the $100,000 price level. Dogecoin is not exempt from this decline, as its price fell nearly 15% and ultimately dropped below $0.31. However, technical analysis shows that this price decline is quite natural in Dogecoin's current trajectory. This technical analysis brings a glimmer of hope to Dogecoin enthusiasts, as it frames the pullback as a natural phenomenon in the broader ongoing bull cycle.
Weekly Golden Cross and its significance for Dogecoin price
Cryptocurrency analyst Kevin (Kev_Capital_TA) has used the social media platform X to highlight the importance of Dogecoin's weekly golden cross in the context of a declining market. According to Kevin, Dogecoin experienced a weekly golden cross in early November, coinciding with the U.S. election period. Historically, such technical indicators signal strong upward bullish momentum. However, Kevin notes that the current pullback aligns with patterns in the past, when Dogecoin experienced significant corrections after the golden cross.
He points out that in previous cycles, Dogecoin faced three separate 50% corrections on its way to the peak of the cycle. This historical behavior provides context for the recent drop to $0.31; according to Kevin, this is a typical pullback for a bull market. He emphasizes that this type of pullback is not only expected but also necessary to maintain the bullish structure of the market.
Support levels and the golden pocket
Kevin's technical analysis continues to examine the key support levels for Dogecoin that could determine the next move for this meme coin. To obtain these support levels, he outlined the macro-structural support area and the golden pocket, which is widely regarded as a strong support zone based on Fibonacci retracement. According to his assessment, a 45% correction from Dogecoin's recent high would align with these levels and potentially set the stage for a continuation of the upward trend.
With that in mind, Dogecoin's recent high price of approximately $0.48 is a level it reached in early December. If Dogecoin can capitalize on this golden pocket without closing below $0.26 on a weekly basis, this would be sufficient to maintain the integrity of the bullish market structure. However, breaking below the support level of $0.26 could pose trouble for Dogecoin and lead to a change in its price trajectory in the broader trend.
At the time of writing, Dogecoin is trading at $0.3179, marking a sharp decline of 12% in the past 24 hours and an even more significant drop of 22% over the past seven days. This recent decline has brought Dogecoin to its lowest level since early November, breaking the $0.35 threshold for the first time in over a month. However, the support level of $0.26 will remain a focus in determining whether Dogecoin's bullish run is still in effect.
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