DOGE falls below support and is on the verge of crashing! Is $0.13 a buy the dip or a run for your life?

DOGE is facing its last opportunity to eliminate the potential for a collapse. The price of DOGE has sharply fallen below the long-term support trend line and has currently reached the 1 Fibonacci retracement level at 0.13 USD, at a critical moment where a rebound or further decline could determine the trend for the coming months. If the closing price of DOGE ultimately falls below 0.13 USD, it could drop to around 0.02 USD at the 1.618 Fibonacci extension level, representing an 85% decrease from the current price.

0.13 USD Lifeline: The Key Watershed for DOGE's Collapse or Rebound

(Source: Trading View)

The price of DOGE has reached the 1 Fibonacci retracement level of 0.13 USD, a price level that holds special significance in technical analysis. Fibonacci retracement is a technical tool based on the golden ratio, used to identify potential support and resistance levels. The 1x retracement level typically represents a complete retracement of prior upward movement and is a key battleground for bulls and bears.

If DOGE's final Closing Price falls below $0.13, it could drop to the 1.618 Fibonacci extension level around $0.02, an 85% decrease from the current price. Such a decline is not impossible in the cryptocurrency market, as DOGE has experienced similar magnitude pullbacks multiple times during past bear market cycles. The 1.618 extension level is a significant ratio in the Fibonacci sequence and often becomes the ultimate support area under extreme market conditions.

Why is 0.13 USD so critical? From multiple technical dimensions, this price level is a convergence point of various factors. First, it is the 1 Fibonacci retracement level, representing a complete reversal of the prior uptrend. Second, it coincides with the lower boundary of a descending triangle that has persisted for a year, and this overlap enhances the technical significance of this price level. Third, from the perspective of volume distribution, there is a substantial historical trading record around 0.13 USD, indicating that many investors have their cost concentrated in this range.

The recent double bottom pattern has reinforced this trend, positioning $0.13 as the bottom. A double bottom is a classic bullish reversal pattern that forms when the price touches the same support level twice and rebounds, indicating strong buying support at that price level. If the double bottom pattern is valid, the target is to reclaim the $0.19 0.618 Fibonacci retracement level and establish a more solid higher base.

Historical patterns reveal: falling below the trendline is actually a precursor to a DOGE surge

However, the fall of DOGE below the support trend line may also mark the beginning of the next bull market, serving as a launch platform for the deceptive bullish pattern pointed out by the popular pseudonymous analyst Trader Tartigrade. The latest monthly closing price is below the rising trend line that has persisted for a year, and historically, this trend usually signals the “DOGE bull run season,” rather than a collapse.

This counterintuitive phenomenon has been validated multiple times in the historical trend of DOGE. At the end of 2020 and the beginning of 2021, DOGE briefly fell below the long-term upward trend line, triggering panic selling in the market. However, less than two months after this drop, DOGE launched an epic surge, skyrocketing from about $0.002 to $0.73, an increase of over 36,000%. A similar pattern also appeared in 2023, where a brief drop below the trend line was followed by a strong rebound.

Why can breaking below the trend line be bullish rather than bearish? The logic behind this lies in market psychology and the washing out of weak hands. When the price breaks below a long-term trend line, technical traders typically set stop-loss orders and exit the market, leading to concentrated selling pressure in the short term. However, this selling often washes out weak holders, concentrating the chips into the hands of more steadfast long-term investors. Once the selling pressure has been released, the market has the foundation for a rebound.

Trader Tartigrade refers to this pattern as a “deceptive bullish pattern” because it appears extremely bearish on the surface but is actually accumulating momentum for a stronger rise. The key characteristics of this pattern are: a brief and sharp fall accompanied by high trading volume, followed by a quick recovery. If DOGE can regain the $0.13 level and confirm the support as valid in the coming weeks, this breakdown may be confirmed as a false breakout.

Descending Triangle Breakout: Technical Path to $1

(Source: Trading View)

The price level of $0.13 also coincides with the lower boundary of a descending triangle that has persisted for a year, thus forming a potential breakout pattern. The descending triangle is a classic technical pattern that is usually seen as a continuation pattern, but in some cases, it can also turn into a reversal pattern. This pattern consists of a horizontal support line and a downward sloping resistance line, indicating that selling pressure is gradually weakening while the support level remains stable.

DOGE's target price after breaking 0.13 USD

First Target: $0.19 (0.618 Fibonacci retracement level, 46% increase)

Second Target: $0.50 (Previous High, 220% Increase)

Ultimate Goal: $1.00 (complete form target, 530% increase)

The momentum indicator also supports this view. The Relative Strength Index (RSI) shows a clear bullish divergence with recent price trends, suggesting potential strength. A bullish divergence in RSI occurs when the price makes a new low but the RSI does not, which often indicates a depletion of downward momentum and an upcoming rebound. This technical signal has been validated multiple times in the historical trends of DOGE and is one of the reliable indicators for assessing trend reversals.

If the bullish pressure returns, the upcoming MACD death cross may only be temporary. MACD (Moving Average Convergence Divergence) is a trend-following indicator, and the death cross is usually seen as a bearish signal. However, if the price quickly rebounds after the MACD death cross, it often signifies a bottom formation, as the death cross in such cases is more of a lagging indicator rather than a leading indicator.

If the price cleanly breaks through the triangle pattern, it is expected to initiate a rise of about 220% towards the previous high near $0.50, with a target price of $1 for the complete pattern, and a potential increase of up to 530%. This target price calculation is based on the measurement rules of a descending triangle: projecting the height at the widest part of the pattern to the breakout point to derive the theoretical target price.

Macroeconomic Environment and Optimal Buying Timing Assessment

However, this approach may depend on favorable market conditions, such as the U.S. lowering interest rates in December to stimulate demand for higher-risk investments like meme coins. DOGE, as a high-risk asset, has its price trend highly correlated with the macro liquidity environment. When the Federal Reserve cuts interest rates, market liquidity increases, and investors' risk appetite tends to rise, often driving up speculative assets including DOGE.

So, is $0.13 really the best buying opportunity? There is no absolute answer to this question, but it can be analyzed from the perspective of risk-reward ratio. If buying around $0.13, setting a stop loss below $0.12 (about 8% loss), and targeting $0.50 (about 220% gain), the risk-reward ratio is approximately 1:27.5, which is mathematically very attractive. However, this high risk-reward ratio is predicated on DOGE successfully holding the support at $0.13 and triggering a Rebound.

For conservative investors, a more prudent strategy is to wait for clear reversal signals before entering the market. For example, waiting for DOGE to regain a position above $0.15 and confirming that support is effective, or waiting for the RSI to break above 50 and enter the bullish zone. Although this may result in missing some gains, it can significantly reduce the risk of a failed bottom fishing. For aggressive investors, positions can be built in batches around $0.13, with a stop loss if it falls below that level and adding to the position if there is a rebound. This strategy can capture maximum returns while controlling risks.