Dogecoin (DOGE) is currently undergoing a significant macro retest after validating a head and shoulders formation on the price chart. According to recent technical analysis, Recto Capital, this retest will take place in the confluence support area. This consists of a macro downtrend in blue and lower range support in black.
Head-and-shoulders pattern leads to important re-examination
Last week, Rekt Capital discussed the possible development of a head-and-shoulders formation on DOGE’s price chart. If verified, this pattern will cause DOGE to fall into the confluence support region. In the latest analysis, analysts confirmed that the Head & Shoulders formation was indeed verified, leading to the current macro retest attempt.
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The confluence of macro downtrend and range-low support is considered an absolutely critical area for DOGE. This is because a successful retest at this level could confirm a new macro uptrend for the cryptocurrency.
It is important to note that on the weekly time frame, the confluence of the macro downtrend and the range low looks almost perfect. However, for monthly time frames, this confluence is approximate.
This difference between timeframes suggests that DOGE could still fall below the black range low before touching the blue macro downtrend on the monthly timeframe.
Impact of a successful retest
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If DOGE successfully retests the confluence support region, it would be an important milestone for the cryptocurrency. A successful retest would confirm a new macro uptrend in DOGE, potentially setting the stage for further price increases in the future.
Dogecoin is currently at a critical juncture where it is retesting the confluence support area consisting of a macro downtrend and range low. This important moment comes with validation of the Head and Shoulders pattern, which could confirm a new macro uptrend for cryptocurrencies inspired by the popular meme.
If Dogecoin can enter a bullish stance and the market supports it, DOGE could possibly reach $0.2.
