Dogecoin (DOGE) Price: From 100% Gains to 18% Correction - What Comes Next?

TLDR

Table of Contents

DOGE has dropped over 18% since May 10th, falling from local high
Analyst Ali Martinez suggests a possible retest of the $0.213 support level
Positive funding rates indicate more traders expect price increases than decreases
DOGE is currently trading around $0.23, above its 200-day EMA support at $0.21
Technical indicators suggest potential for a 20% rally to $0.27 if support holds

Dogecoin’s price action has entered a critical phase as the popular meme cryptocurrency consolidates below the $0.26 resistance level. After an impressive rally that began in early April, DOGE has faced increasing pressure following a sharp rejection last week.

Since reaching a local high on May 10th, Dogecoin has experienced a correction of more than 18%, retracing a portion of the gains from its earlier surge. The pullback has disrupted the bullish structure that had formed when DOGE broke above $0.13 and subsequently doubled in price within a month.

The market is now watching closely to determine if Dogecoin can defend current levels or if further downside is on the horizon. According to analyst Ali Martinez, the recent rejection has created conditions for a possible revisit to the $0.213 level—a key zone that previously acted as both resistance and support.

#Dogecoin $DOGE may want to revisit $0.213! pic.twitter.com/ruKqcXEqNP
— Ali (@ali_charts) May 20, 2025

On-Chain Metrics Show Positive Signs

Despite the recent price correction, on-chain metrics for Dogecoin show some encouraging signs. According to data from Coinglass, the OI-Weighted Funding Rate for DOGE stands at 0.0094%, reflecting a positive rate where long positions pay shorts.

This metric is based on the yields of futures contracts weighted by their Open Interest rates. The positive reading suggests that more traders are betting on price increases than decreases, often signaling bullish sentiment in the market.

Another promising indicator comes from Santiment’s Age Consumed index, which tracks the movement of previously dormant tokens. Recent spikes in this metric for DOGE have historically preceded price increases, with the latest uptick on Tuesday potentially forecasting a new uptrend.

These on-chain indicators provide some counterbalance to the bearish price action, suggesting that market participants haven’t given up on Dogecoin’s potential for recovery.

Technical Outlook Points to Key Support Levels

From a technical perspective, Dogecoin price has repeatedly tested and found support around its 200-day Exponential Moving Average (EMA) at $0.21 since last week. At present, DOGE trades above this support level at approximately $0.23.

The Relative Strength Index (RSI) on the daily chart reads 61, positioning it above the neutral level of 50 and indicating the presence of bullish momentum despite the recent price decline.

If the 200-day EMA continues to hold as support, technical analysts suggest DOGE could rally by about 20% from current levels to retest the 50% price retracement level at $0.27. This retracement is measured from the August 2023 low of $0.05 to the December 2024 high of $0.48.

However, the situation remains precarious. If DOGE breaks and closes below the 200-day EMA at $0.21, the correction could extend further, potentially retesting the next weekly support level at $0.18.

The coming trading sessions will likely prove decisive for Dogecoin’s mid-term trajectory. If bulls can reclaim control and push DOGE back toward the $0.26 resistance, the meme coin narrative could regain strength.

Conversely, if bearish momentum builds and DOGE breaks lower, it would signal a continuation of the current downtrend.

For now, all eyes remain on this pivotal support zone as Dogecoin navigates a challenging market environment. The price currently hovers just above key support levels, and the next move could determine whether the recent correction is merely a pause in a larger uptrend or the beginning of a more substantial decline.

The broader crypto market conditions will also play a role in Dogecoin’s performance, as DOGE has historically acted as a high-beta asset, often outperforming during bullish market phases.

Current price action suggests the recent strong momentum may be stalling, but positive on-chain metrics and technical support levels provide some hope for DOGE enthusiasts looking for signs of a potential recovery.

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