The cryptocurrency market broke the bullish streak that had been driving the value of virtually every cryptocurrency in the top 30 of the market.
BTC, ETH, BNB, Solana, Terra and others, which had been recording consistent gains of up to 5% on the day, saw their value fall again.
The same was true for memecoins like Dogecoin that face severe exhaustion after their recent gains, causing a slight pullback.
However, while things could be looking bad for Dogecoin, the analyst Akash Girimath highlights that this recent retraction pushed DOGE into a demand zone, suggesting the possibility of a rapid increase.
“The price of Dogecoin has retraced 14% after a 40% rally that started on March 14. While the pullback allows Dogecoin buyers to rebound, it was caused by BTC’s sudden downtrend,” he said.
Furthermore, he highlighted that regardless of the reason for the dip, the pullback has made DOGE retest the $0.127-$0.137 demand zone, which will provide the bulls with the extra strength to start another leg.
“The resulting rally will propel DOGE to retest the weekly resistance barriers of $0.163 and $0.194. Removing these obstacles is crucial for market makers to collect buy-stop liquidity above the $0.194 barrier,” analyst.
In that sense, he pointed out that this rise would constitute a 60% gain for investors who are willing to seize the opportunity.
“Now is the right time as the Dogecoin price retests the daily demand zone,” he said.
On the other hand, Girimath noted that a bearish scenario could be confirmed if the bulls do not show strength.
“A demand zone collapse will put a final nail in the bulls’ coffin and bring down the value of the DOGE. A daily candle close below $0.127 will invalidate the Dogecoin price bullish thesis, creating a lower low.
Finally, he said that this move will also lead to the breakdown of the demand zone, indicating an increase in selling pressure.
“In this situation, traders can expect DOGE to return to the $0.109 support level, allowing buyers to regroup and give the uptrend another chance.”