Dogecoin holds critical support after 3.2% daily decline while analysts identify bullish reversal signals pointing toward $0.20 recovery following eight-week high at $0.156.
What Happened: Dogecoin Price Tests Support
The leading memecoin reclaimed key price levels during the recent market recovery. It reached $0.156 on Tuesday, marking its highest point in eight weeks.
The cryptocurrency opened 2026 at $0.117 and recorded a 21% gain through early January. It had previously declined more than 50% from Q2 2025 peaks, remaining in a downtrend until last week's breakout.
Trader Tardigrade noted on the monthly chart a pair of Tweezer candlesticks that typically signal bullish reversals.
"DOGE has nearly recovered last month's losses in just 8 days," the analyst stated, adding that "clearly, bullish momentum is building up."
The three-day chart displayed a three-month falling wedge pattern. Dogecoin breached the upper boundary during its recent surge, triggering an initial move toward the $0.140-$0.150 zone.
The analyst compared current action to 2024 performance, when the token moved within a multi-month falling wedge before breaking out. He suggested the price might retrace briefly to test the breakout area before the next major advance.
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Why It Matters: Pattern Targets $0.20
The cryptocurrency appears to be forming a bullish pennant on the daily chart. A breakout from this formation would trigger a 40% advance toward $0.20, which was lost during early Q4 pullbacks. However, Dogecoin's price must close above $0.142 to maintain the pattern.
Ali Martinez warned the cryptocurrency is "hanging by a thread."
The market observer stressed Thursday that Dogecoin trades within critical support between local lows of $0.118 and recent highs.
A loss of this zone could prompt a retrace exceeding 40%.
The UTXO Realized Price Distribution metric cited by Martinez places the next major support around $0.073, where over 28 billion Dogecoin tokens previously changed hands.
The three-day chart shows Dogecoin traded within an ascending channel since 2023, but late 2025 corrections saw the memecoin lose the lower boundary.
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