As the price of Dogecoin ($DOGE) consolidates just above the 0.40 USD mark, investors are weighing up whether the market is about to hit new highs or if a deeper pullback could be imminent.
Dogecoin has moved within striking distance of 0.50 USD twice in the last two weeks.
But now a double top may have formed, suggesting that bears may soon regain control of this market. Other recent technical developments are also a warning sign.
DOGE also broke out of a short-term southward trend this week and slipped below its 21DMA, further indicating a weakening of upside momentum.
If support in the 0.33-35 USD range in the form of the late 2021 highs is broken, a sudden 50% pullback to the early 2024 highs in the 0.20 USD range could be imminent.
Dogecoin Price Outlook – Will Bulls Buy the Dip?
However, given the current bullish market environment for cryptocurrencies, it is difficult to bet on such a sharp decline now.
The rhetoric of the new US President Donald Trump continues to be very positive for cryptocurrencies.
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 high that we are on the cusp of a new golden age for the US crypto industry and the crypto market more broadly.
And $DOGE remains in a particularly strong position as the new Department of Government Efficiency (DOGE) continues to attract a lot of attention on social media and traditional media.
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
This makes it almost certain that DOGE will retain a large share of the mind share in the future as the current crypto bull market continues to bubble.
All of this suggests that dips are likely to be short-lived and DOGE price will continue to rise towards 1 USD in the coming months.
Owners would do well to keep their diamond hands and not allow themselves to be shaken by unpleasant short-term dips.
How high can $DOGE go?
The outlook for Dogecoin price is good in the coming months, with 1 USD certainly a reasonable target.
But how much further could the DOGE price rise? Well, Dogecoin has arguably gone through three market cycles since its launch in 2014, and the cycles can provide clues.
If you draw a Fibonacci extension upwards from the previous bear market low to the previous bear market high, you can see that DOGE has always rallied well above the 4.236 Fibonacci level and has exceeded this Fibonacci extension by more than 10x during its 2021 rally.
The 4.236 Fibonacci extension from the 2022 bear market lows back to the 2021 highs suggests that Dogecoin should reach at least 3 USD per token this cycle.
But as history has shown, DOGE has regularly exceeded this level by a wide margin. With that in mind, it would not be unreasonable to expect a Dogecoin price of 10 USD this cycle.
Of course, that would require a market capitalization of several trillion dollars, which may be asking a bit too much.
But DOGE could easily increase tenfold from current levels and reach a market capitalization of 100 billion USD.
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