Dogecoin (DOGE) might be setting up for a rebound, according to technical analysis, but it could also see a further drop,suggesting that traders are bracing for more volatility in the meme coin.

This analysis comes as the Relative Strength Index (RSI) signaled extremely oversold conditions, and the digital asset is nowpivoting around a key support level.

For traders following the 4-hour candlestick chart,highlighted by a TradingView analyst, the probability of a further decline is still in the 30%-40% range,suggesting that there is a good chance of the digital asset continuing down. This analysis is unfolding amid a broader market selloff that has seen major cryptocurrencies, like Bitcoin (BTC) and Ethereum (ETH), experience heightened volatility.

The RSI is a momentum indicator used to measure the magnitude of recent price changes to evaluate overbought or oversold conditions in the market. Its readings can range from zero to 100. Values above 70 indicate that the asset may be overbought, and a pullback could be expected, while readings below 30 suggest that the asset is oversold, setting the stage for a possible recovery.

The RSI dropped below 10, which is an extremely low level that signals severe selling pressure. Such low RSI readings are usually encountered when the selling momentum becomes too overwhelming, and as a result, the probability of a further decline is low.

However, the RSI is not a perfect indicator, and its signals can be mixed. The fact that there is still a 30%-40% chance of a further decrease highlights the uncertainty that traders are facing.

Dogecoin is currently pivoting around the critical support level of $0.165. This level is crucial for bulls as it could pave the way for a rebound. If this support holds and the price of DOGE manages to move higher, the next resistance level to watch is at $0.180. A decisive move above this level could signal a bullish reversal, leading to further gains.

However, if the price breaks below the $0.165 support, then deeper support levels at $0.155 and $0.145 could come into play.

Support levels are price points where buying pressure is expected to outpace selling pressure, preventing the asset’s price from falling further. These levels are determined based on historical price data and trader psychology. Conversely, resistance levels are price points where selling pressure is anticipated to outvieew buying pressure, hindering the asset’s ability to rise.

The meme coin is also dealing with the broader crypto market sentiment, which is largely dependent on Bitcoin’s price action and macroeconomic trends.

The apex coin is nowpivoting around a key support level of $29,000, which is crucial for bulls as it could pave the way for a rebound towards the next resistance level at $31,000.

If this support holds and the price of BTC manages to move higher, the next resistance level to watch is at $31,000. A decisive move above this level could signal a bullish reversal, leading to further gains. However, if the price breaks below the $29,000 support, then deeper support levels at $28,000 and $27,000 could come into play.

Bitcoin’s stability above the critical support levels could provide the confidence needed for Dogecoin to recover and move higher. However, if BTC faces a correction and breaks below the key support levels, the probability of the meme coin dipping further could increase.

Moreover, macroeconomic trends, such as interest rate decisions, regulatory developments, and geopolitical events, can influence market sentiment and contribute to uncertainty and volatility in the crypto market, ultimately impacting Dogecoin’s price action.

Despite the current bearish outlook, several factors could trigger a Dogecoin recovery. These potential catalysts offer a glimmer of hope for investors who believe in Dogecoin’s long-term potential.