A technical analyst predicts Dogecoin faces significant downside risk even if Bitcoin stages a near-term rally. The warning comes as historical patterns from 2022 appear to be repeating across cryptocurrency markets.
Pseudonymous analyst VisionPulsed outlined the bearish scenario in a video posted on YouTube. The forecast centers on diverging price action between Bitcoin and Dogecoin, mirroring conditions that preceded sharp declines two years ago.
Bitcoin Shows Signs of Potential Reversal
Bitcoin’s daily stochastic RSI indicator provides the foundation for the analysis. The oscillator is declining from overbought territory toward oversold levels. This same pattern has coincided with fresh price lows throughout October, November, and early December.
The current cycle differs from previous resets. Bitcoin may form a higher low as the indicator reaches oversold conditions. Such price action would mark the first higher low in two months.
VisionPulsed emphasized the significance of this potential shift. A confirmed higher low would signal a short- to medium-term trend reversal. This scenario could trigger a relief rally across cryptocurrency markets.
The analyst cautioned against premature optimism. The bullish case depends entirely on Bitcoin maintaining support above recent lows. A breakdown below current levels would invalidate the reversal thesis and extend the downtrend.
Bitcoin currently trades within the lower band of a seven- to eight-day Gaussian channel. The cryptocurrency has occupied this zone for approximately four weeks. During the 2022 accumulation period, Bitcoin spent 63 days in similar territory before breaking lower.
Dogecoin Divergence Signals Weakness
Dogecoin’s technical structure presents a stark contrast to Bitcoin. The memecoin continues printing lower lows on daily timeframes while Bitcoin attempts to stabilize. This divergence mirrors conditions observed throughout 2022.
During that period, Dogecoin declined steadily while Bitcoin formed a base with higher lows. The pattern preceded a severe capitulation event for DOGE.
VisionPulsed projects a possible relief bounce for Dogecoin if Bitcoin rallies. The analyst places resistance around $0.20 for January. He described this level as potentially the final opportunity before a deeper correction.
The base case scenario involves Dogecoin declining to the $0.05-$0.06 range. This projection represents a 60% drop from current prices.
At the time of writing, Dogecoin trades at around $0.1259, indicating a 4.74% decrease in the last 24 hours. The analyst stated Dogecoin shows no bullish indicators until it breaks its established downtrend. Current technical conditions favor continued weakness.
DOGE price chart, Source: CoinMarketCap
Source: https://coinpaper.com/13182/dogecoin-to-0-05-analyst-issues-shocking-60-crash-warning
