Dogecoin, the original meme coin, faces a potential dip before a significant upward surge, according to market analyst Exocet. 

In a recent TradingView idea, the analyst identified a falling wedge pattern on the DOGE daily chart, signaling a bullish continuation but with a near-term correction on the horizon. This setup, alongside broader market uncertainty, suggests traders might need to brace for a temporary decline before the coin embarks on its next major rally.

Dogecoin Forms Falling Wedge

The chart reveals Dogecoin’s breakout last November, which propelled the price to a three-year peak of $0.48 by December, a 269% surge from the $0.13 mark fueled by high trading volume and market-wide optimism. However, this rally met resistance, with the new year introducing a sharp correction to $0.1961 on Wednesday, Feb. 26. 

This correction led to the formation of a falling wedge, a pattern featuring converging downward-sloping trendlines that often precede a bullish move to an uptrend. Currently trading at $0.2109, Dogecoin still sits within this falling wedge.

Exocet noted that the falling wedge is a critical structure, with the upper trendline connecting lower highs at $0.4340, $0.2867, and potentially $0.2287. Further, the lower trendline appears to link lows around $0.32 and the recent $0.1961 mark.

DOGE Could Drop Further

Notably, the DOGE price currently hovers near the middle of this wedge after bouncing from the lower trendline, indicating buyer support at this level. However, Exocet warned that the broader crypto market may not have reached its bottom, which could delay Dogecoin’s breakout.

The analyst predicts that Dogecoin will soon test the upper trendline of the wedge, positioned around $0.2350, an important resistance level to watch. A rejection at this point appears likely, potentially driving the price back to an interim low near $0.1750, close to the recent bottom. 

This pullback aligns with the lower trendline of the wedge, presenting a potential entry point for those looking to capitalize on the expected recovery. Exocet stressed that investors should monitor $0.2350 for signs of a breakout but advises patience for a possible dip to $0.1750 if the price fails to break through resistance.

Breakout Targets $0.5434

Should Dogecoin overcome the $0.2350 barrier with strong volume, the falling wedge pattern could lead to a substantial upside. The height of the wedge, measured from the $0.4843 peak to the $0.17590 low, spans $0.3084. Adding this to the breakout point of $0.2350 projects a target of about $0.5434.

However, this bullish scenario hinges on favorable market conditions, as external factors, such as Bitcoin’s recovery, will play a major role in Dogecoin’s ability to sustain a breakout. Trading volume within the wedge has declined, a typical sign of consolidation, but a spike will confirm a breakout if it occurs.

Meanwhile, analytics resource NineDragonsVenture suggested that Dogecoin at the current position presents an attractive risk-to-reward ratio. According to them, with BTC dropping to the lower end of the $80K mark, investors are shifting capital to altcoins like Dogecoin.

Interestingly, they maintained that attractive opportunities like what Dogecoin currently presents appear once a month. From the current area, the analytical platform sets the first take-profit target at $0.31249 and the second target at $0.41533.