The Dogecoin price is currently battling to break above the $0.40 price level again, but technical analysis suggests that might not be the only challenge facing the meme-inspired cryptocurrency. According to technical analysis by crypto analyst Kevin (@Kev_Capital_TA), Dogecoin is currently entangled in a struggle with a key resistance level defined by the macro 0.5 Fibonacci extension, which may ultimately dictate whether the price can surpass $0.40 or confront renewed selling pressure.
Moment Of Truth At Macro 0.5 Fibonacci Extension Resistance
The Fibonacci extension indicator is a widely utilized tool among technical analysts for identifying price targets and resistance levels. In the context of Dogecoin, crypto analyst Kevin applied this Fibonacci extension projected from the cryptocurrency’s low of around $0.15 in mid-October. The macro 0.5 Fib extension marks a significant barrier that has impeded upward momentum for Dogecoin.
This 0.5 Fib extension holds added significance, as it coincides with an order block during Dogecoin’s most recent correction. Kevin underscored this resistance level as a “moment of truth,” indicating that successfully breaking through is crucial for DOGE to strive towards the macro golden pocket.
Given the current market dynamics, Dogecoin’s ability to breach this resistance is likely contingent on broader market movements, particularly on Bitcoin’s performance, as noted by analysts.
#Dogecoin is in an all out battle with the macro 0.5 Fib extension. This is big resistance and is the key to make it back up to the macro golden pocket. #DOGE success here is going to fully depend on #BTC ability to breakout of its macro golden pocket. Moment of truth folks. pic.twitter.com/vWtfpVahv1
— Kevin (@Kev_Capital_TA) January 6, 2025
Bitcoin’s Role in Dogecoin’s Price Momentum
Bitcoin, as the dominant cryptocurrency, often sets the tone for the broader market, including prominent altcoins like Dogecoin. Recently, Bitcoin’s inflows and its break above the $100,000 price level have positively impacted other cryptocurrencies.
Kevin pointed out this correlation, underscoring that Dogecoin’s journey towards its macro golden pocket is linked to Bitcoin’s performance. If Bitcoin achieves a breakout from its macro golden pocket, it may generate the momentum needed for Dogecoin to surmount its 0.5 Fibonacci resistance. Conversely, if Bitcoin falters, Dogecoin may be vulnerable to further consolidation or even potential retracement.
The golden pocket represents a specific range within the Fibonacci extension levels, typically between the 0.618 and 0.65 Fib extension levels. When referred to as a macro golden pocket, it relates to larger time frames, such as weekly or monthly charts, indicating long-term price movements. Kevin previously identified $0.49 as the “macro golden pocket,” marking it as the first major resistance Dogecoin bulls must overcome for a bullish breakout.
Currently, Dogecoin is trading at $0.39, reflecting a 25.5% increase over the past week.
