Dogecoin (DOGE) May Drop 40% to Form Strong Support Before a Potential 400% Surge

Market watcher has argued that Dogecoin (CRYPTO: DOGE) could drop another 40% to reach a strong support level before a potential 400% surge.

What Happened: Dogecoin has been struggling at key resistance levels this week. The meme coin is currently trading at $0.1552, showing a 0.37% decrease over the last 24 hours and 2.06% in seven days.

It attempted to break through the $0.16 resistance on Wednesday but failed, dipping as low as $0.151 before recovering slightly.

However, some analysts believe the coin could see a significant upward movement after a potential short-term decline. A recent analysis from TradingView, shared by SwallowAcademy, suggests that Dogecoin could face a further decrease to hit an awaited entry and a new support zone, setting the stage for a fourfold rebound.

The chart highlights DOGE’s price action against Tether (CRYPTO: USDT) on a daily timeframe, showcasing the cryptocurrency’s volatility throughout early 2024.

It shows a sharp upward move early in 2024, with Dogecoin’s price rallying significantly from around $0.09 to reach a peak of nearly $0.23. Afterward, the coin experienced a substantial decline.

Later in 2024, the price dropped again to around $0.09, where it encountered support before rebounding to over $0.45.

Now, SwallowAcademy predicts a similar pattern may unfold in 2025. The analyst believes Dogecoin could drop an additional 40% to the awaited entry at $0.09, forming the solid support zone again, before rebounding by fourfold. Specifically, the analyst suggests that after a 400% surge from the support level of $0.09, Dogecoin would rise to $0.45.

For now, Dogecoin is trading above $0.15, and the analyst is awaiting a dip to $0.09.

See More: Top 50 Cryptocurrency Price Chart

False Break Signals Possible Reversal: Another pattern has caught the attention of traders. Trader Tardigrade highlighted Dogecoin’s first false break since December 2024.

The coin has generally been following a downtrend, marked by lower highs and lower lows, a sign of a bearish market. However, after dropping to $0.13 on April 7, the price rebounded but failed to maintain the momentum and quickly dipped again.

The analyst interprets it as a “false breakdown,” which could be a crucial signal that the downward trend may not last. According to the chart, this could be an early indicator of a bullish reversal.

With the price remaining above the support line for several days, the false break suggests that Dogecoin may be gearing up for an upward move. According to Tardigrade, the next potential target could be $0.42.

Short-Term Pressure, Long-Term Strength: In addition to the technical chart patterns, data from IntoTheBlock reveals interesting insights into Dogecoin’s user activity.

The data may indicate that Dogecoin could face short-term pressure due to shifting activity among different holder categories. Over the past month, the number of long-term holders (those holding for one year or more) decreased by 2.67%, and cruisers—those holding between one and twelve months—declined by 11.81%.

In contrast, short-term traders, holding for less than a month, saw an increase of 107.45%. This trend suggests growing speculative interest, which may contribute to near-term volatility and price fluctuations.

However, the long-term outlook appears more favorable based on the behavior of large holders.

Further data highlights a consistent and steep rise in large holder inflows. Over the last seven days, these inflows rose by 5.33%, followed by a substantial 323.86% increase over the last 30 days. Most notably, they experienced a remarkable 3,722% surge over the last 90 days.