As the Dogecoin ($DOGE) price consolidates just above $0.40, investors are weighing up whether the market could be about to vault to new highs, or whether a deeper pullback could be in store.
Dogecoin has come within striking distance of $0.50 on two occasions in the past two weeks.
But a double top may have now formed, suggesting the bears could be about to regain control of this market. Other recent technical developments are also flashing warning signs.
$DOGE also broke to the south of a short-term trend this week and has slipped beneath its 21DMA, further suggesting a waning of bullish momentum.
If support in the $0.33-35 area in the form of the late 2021 highs were to break, a sudden 50% drop back to early 2024 highs in the $0.20 area could be on the cards.
Dogecoin Price Outlook – Will the Bulls Buy the Dip?
However, amid the current bullish crypto market environment, its tough to bet on such a deep pullback right now.
Rhetoric from incoming US President Donald Trump remains super bullish for crypto.
BREAKING: Trump confirms he hopes to open a 'strategic reserve' of cryptocurrency.
Trump recently announced David Sacks as Crypto Czar.
CRAMER: "Strategic petroleum reserve-like for crypto?"
TRUMP: "Yeah, I think so. We're gonna do something great with crypto. We don't want… pic.twitter.com/ZmA9K2QNjm— Eric Daugherty (@EricLDaugh) December 12, 2024
Expectations remain elevated that we are on the cusp of a new golden age for the US crypto industry and crypto market’s more broadly.
And $DOGE remains in a particularly strong position, as the incoming Department of Government Efficiency (D.O.G.E) continues to attract a lot of attention across social media and traditional media outlets.
DOGE is undergoing a serious analysis of wasteful and burdensome regulations, and is looking for public feedback!
Which are the really bad ones? Please DM us the CFR provision, the relevant text from the regulation, and the adverse consequences of said regulation.— Department of Government Efficiency (@DOGE) December 12, 2024
That all but guarantees that $DOGE is going to retain a commanding percentage of “mind share” as the current crypto bull market continues to bubble.
All of that suggests dips are likely to remain short-lived and the Dogecoin price is likely to continue its push towards $1 in the coming months.
Holders would do well then to exercise their diamond hands, and refrain from getting shaken out by any uncomfortable short-term market dips.
How High Can $DOGE Go?
The outlook for the Dogecoin price is strong in the coming months, with $1 certainly a reasonable target.
But how much further could the Dogecoin price go than this? Well, Dogecoin has arguably been through three market cycles since its inception in 2014, and the cycles can offer clues.
When drawing a Fibonacci extension upwards from the prior bear market low to the prior bear market high, it can be seen that Dogecoin has always rallied well beyond the 4.236 Fibonacci level, exceeding this Fibonacci extension by over 10x during its 2021 rally.
The 4.236 Fibonacci extension level from the 2022 bear market lows back to the 2021 highs suggests that Dogecoin should at least hit $3 per token this cycle.
But as history has shown, Dogecoin has routinely blown well past this level. Given that context, it wouldn’t be unreasonable to expect a $10 Dogecoin price this cycle.
Of course, that would imply a multi-trillion-dollar market cap, which might be a bit much to ask.
But Dogecoin could definitely 10x from current levels to reach a market cap in the $100s of billions.
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