Dogecoin has dropped 3.2% on the daily chart and is now repeatedly testing the critical support level. Although there is short-term pressure, many analysts are optimistic about its upward potential, aiming to recover the important resistance lost in Q4 last year.

Momentum is heating up at the start of this year

Since the beginning of the year, DOGE has performed well. Starting from an opening price of $0.117 at the beginning of the year, it has already increased by 21%. Recently, market sentiment in the crypto space has improved, and Dogecoin's price has retaken several key levels, even reaching an eight-week high of $0.156 this Tuesday.

But here’s what to watch out for—DOGE fell from its Q2 high last year, with a decline of over 50%, remaining in a downtrend until a clear technical breakout occurred last week. Analyst Trader Tardigrade pointed out that on the monthly chart, Dogecoin has formed a rare "pin bar" bottom pattern, which often indicates a potential trend reversal.

He also added, "In just 8 days, DOGE has almost wiped out all of last month’s losses," indicating that buying momentum is clearly strengthening. He previously mentioned that Dogecoin has successfully broken through a critical upward structure, releasing strong bullish energy.

Technical pattern points to an upward trend

From a medium-term technical perspective, Dogecoin has formed a descending wedge pattern on the three-day chart that has persisted for three months.