When the price of Dogecoin ($DOGE) stabilizes above $0.40, investors are contemplating whether the market can reach new highs or if there will be a deeper pullback.

Dogecoin has come very close to the $0.50 mark twice in the past two weeks.

But a double top may have formed, suggesting that the bears could soon regain control of this market. Other recent technical developments are also raising warning signs.

$DOGE has also broken its short-term trend this week and slipped below its 21-day moving average (DMA), indicating that the bullish momentum is weakening.

If the support level in the $0.33-35 range as the high in late 2021 is broken, the price could suddenly drop by 50% to the early 2024 high in the $0.20 range.

Dogecoin Price Outlook - Will buyers enter when prices fall?

However, in the context of the current cryptocurrency bull market, it is difficult to bet on such a deep pullback right now. The statements of the new U.S. President Donald Trump remain very optimistic about cryptocurrency.

There are still very high expectations that we are on the brink of a new golden age for the U.S. cryptocurrency industry and the cryptocurrency market in general.

And $DOGE still holds a particularly strong position as the upcoming Department of Government Efficiency (DOGE) continues to attract significant attention on social media and traditional media.

This ensures that $DOGE will maintain a significant 'trending' ratio as the current cryptocurrency market rally continues to explode.

All of this suggests that this downturn may only be short-lived and the price of Dogecoin may continue to rise to $1 in the coming months.

Gold holders should hone their management skills and avoid being swayed by any short-term market downturns.

How high can the price of $DOGE go?

The price outlook for Dogecoin is very optimistic in the coming months, with $1 certainly being a reasonable target.

But how far can the price of Dogecoin go beyond this? Well, Dogecoin is said to have gone through three market cycles since its inception in 2014, and these cycles can provide clues.

When drawing an upward Fibonacci extension line from the previous bear market low to the previous bull market high, it can be seen that Dogecoin consistently rises far beyond the 4.236 Fibonacci level, exceeding this Fibonacci extension by more than 10 times during the 2021 bull run.

The Fibonacci extension level of 4.236 from the 2022 bear market low to the 2021 high indicates that Dogecoin will at least reach $3 per token in this cycle.

But as history has shown, Dogecoin often exceeds this level. In that context, it would not be unreasonable to expect the price of Dogecoin to be $10 in this cycle.

Of course, that means the market capitalization could reach trillions of dollars, a figure that may be somewhat excessive.

But Dogecoin could certainly increase tenfold from its current level to reach a market capitalization in the hundreds of billions of dollars.

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