Dogecoin (DOGE) has recently experienced a stunning surge. In eight days, the price of DOGE increased by almost 200%, reaching a local high of $0.4385 on Tuesday. This surge pushed the daily relative strength index (RSI) to near 93, signaling strongly overbought conditions.

Since then, Dogecoin’s price has corrected by 19%, reaching a price of $0.37 at the time of publication. However, according to cryptocurrency analyst Kevin (@Kev_Capital_TA), who has paid significant attention to X in his Dogecoin price analyses, the correction phase may not be over yet. In number update Kevin wonders how low Dogecoin can go before it resumes its upward trajectory.

How low can Dogecoin go?

“My first price target and the level we will want to maintain for Dogecoin is the $0.30-$0.26 range, which is the gold pocket retracement level,” Kevin stated. “That’s a 30-40% correction from the local peak, which is an ideal size correction in a bull market.”

Kevin further explained the importance of RSI levels in predicting market movements. “A healthy 1-3 week correction/consolidation to cool the metrics would be the most beneficial thing that could happen to Dogecoin. This happened multiple times in 2020-2021,” he noted. “I still think it will happen soon based on the technical data I’m looking at.”

Drawing parallels with the previous bull market, he added: “During the 2020-2021 bull market, Dogecoin reached 90+ on the daily RSI three times, each time marking a local peak or period of consolidation before another rally. We just hit the 90+ level on the daily RSI for the first time, signaling that we potentially have 1-2 more legs up in the bull market before we find a macro top. PS: The second and third legs were larger than the first.

On lower time frames, Dogecoin’s price action formed a symmetrical triangle, a chart pattern often associated with periods of consolidation preceding significant price movements. Kevin noted: “Tracking this weird symmetrical Dogecoin triangle. Honestly, it’s 50/50 which way it goes down. I am still in favor of a correction as the daily RSI is 90+.”

A symmetrical triangle can serve as a continuation or reversal pattern, depending on market conditions. For Dogecoin price, the triangle break aligns with Kevin’s expectation of a correction due to overbought RSI levels.

To estimate the potential size of the price drop after breaking out of a symmetrical triangle, traders measure the height of the triangle’s base – the widest part of the formation. This measurement is then projected down from the breakout point, providing a target for the price movement.

Applying this method to Dogecoin suggests a correction towards the $0.28 price level, which closely aligns with Kevin’s analysis of the $0.30-$0.26 range. “It looks like Dogecoin is starting the correction I have been calling for for several days,” confirmed Kevin after observing the market movement. -I can’t go straight up, guys. Downturns are vigorous and reset the indicators so we can rise higher. I hope no one gets mad at me anymore for telling the truth.”

At press time, Dogecoin is trading around $0.37, retreating approximately 19% from its local high. The price appears to have found short-lived support at $0.35, but with the daily RSI only returning to 80 – still in overbought territory – a continuation of the correction cannot be ruled out.

“A healthy 1-3 week correction/consolidation to cool the metrics would be the most beneficial thing that can happen to Dogecoin,” Kevin reiterated. “It happened many times on the way to the top in 2020-2021. I still think it will happen soon based on the technical data I’m looking at.”

Featured image created with DALL.E, chart from TradingView.com