Dogecoin is currently at a critical and decisive moment with its price correcting by 47%, and market analysts are discussing its next direction.

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Dogecoin's price action has historically shown wild swings, often followed by sharp increases. Cryptocurrency analyst Ari Martinez said that in previous years, patterns such as descending triangles led to sharp price increases. For example, after a 40% retracement in 2017, Dogecoin surged 982%.

The bull-bear battle amid ongoing challenges

A similar situation occurred in 2021, when a 56% price drop preceded a 12,197% bull run. Currently, Dogecoin has emerged from another descending triangle, this time experiencing a 47% correction. This has led some analysts, including Martinez, to expect another major bull run.

Now, in 2024,#DOGEhas broken out of a descending triangle again! It is currently experiencing a 47% price correction, very similar to previous cycles, which could spark the next $DOGE bull run! pic.twitter.com/ZmuHmvIwei — Ali (@Ali_charts) May 1, 2024

Crypto chartist Rekt Capital recently highlighted a Head & Shoulders pattern on the weekly chart, which suggests further downside is likely. Market data corroborates this formation, pointing to a critical test of key support zones, including the macro downtrend and the black range low.

These observations suggest that Dogecoin’s current market position is precarious, with underlying support levels being tested.

Recent developments in Dogecoin’s market dynamics suggest that significant challenges lie ahead. In April 2024, the cryptocurrency experienced a severe downturn along with the broader market, with its market capitalization decreasing by $3.7 billion in just ten days.

Although there was a brief rebound around DOGE Day on April 20, indicating a potential recovery, the recovery was short-lived. The broader impact of the Bitcoin halving event during the same period increased volatility, as it significantly affected other major proof-of-work cryptocurrencies, including Dogecoin.

On-chain data and miner activity

Further insights from on-chain data reveal significant activity from Dogecoin miners, which could influence the coin’s price direction. Notably, recent changes in mineral reserves suggest that the downward trend could continue.

Dogecoin solves profitability | IntoTheBlock

Current on-chain data shows that only 18.45% of Dogecoin addresses have made a profit on their holdings, while "underfunded" (held at a loss) addresses are 32.49%. The largest portion, 49.06% of holders, bought their Dogecoins at prices near the current market value, suggesting that they may be vulnerable to market changes.

As of the latest data, Dogecoin is valued at $0.1262, reflecting a 2.99% decline over the past 24 hours and a 16.54% drop over the past week. This downturn has caused Dogecoin to underperform the broader cryptocurrency market, which has seen a smaller 9.60% decline over the same period. Dogecoin’s total market capitalization has also been affected, falling by about $3.7 billion over the past ten days.