Over the last 12 days, Dogecoin (DOGE) has seen a keen decline, losing over 40% of its value. After trading above $0.48 on December 8, the meme-inspired cryptocurrency briefly dropped to $0.2638 by December 20, sparking a wave of speculation about its near-term direction. The backdrop for this decline has been the broader cryptocurrency market’s response to U.S. Federal Reserve policy signals, with the recent downturn largely attributed to more hawkish forecasts from the Federal Open Market Committee (FOMC).

Although the Fed’s December meeting delivered a widely expected 25-basis-point rate cut, the real shock came when the scatter plot revised to show fewer future cuts than previously expected. The market had been hoping for three rate cuts in 2025, but FOMC guidance now leans toward just two, suggesting a more cautious approach amid persistent inflation pressures. This change in perspective has resulted in massive selling of risky assets, including cryptocurrencies. Bitcoin (BTC) fell below $93,000 and altcoins -20% losses. A staggering $1.17 billion in long positions were liquidated in cryptocurrency markets in 24 hours.

How low can Dogecoin go?

Many prominent analysts have assessed DOGE’s pullback, placing it in the context of historical patterns and macro-level drivers. Technical Analyst Kevin (@Kev_Capital_TA) overview of the most significant events the importance of previous cycles. He notes that Dogecoin has historically experienced many significant corrections towards cycle highs, stating that the current pullback – similar to previous 50% declines – may be part of the normal bull market structure rather than a sign of systemic weakness.

According to Kevin: “In the previous cycle, Dogecoin had three separate 50% corrections on its way to the top of the cycle. If we touch on structural macro support and a macro golden pocket just below, it will be approximately a 45% correction from the peak, which based on historical analysis will be enough for us to resume the uptrend. If we lose 0.26 cents at the weekly close, I would become seriously concerned about this market structure, but until then it should be treated as a normal bull market pullback.

Kevin also highlights Bitcoin’s impact on the altcoin landscape. Instead of focusing solely on the standalone DOGE chart, he encourages traders to “not focus too much on altcoin charts” to gauge the macro direction of the market. BTC remains a key asset whose price action often dictates sentiment in the broader crypto space.

Kevin illustrated this point by sharing a BTC/USDT liquidation heat map, suggesting that the market may be looking to flush out lower liquidity reserves ahead of any significant rebound. “Let’s get all the liquidity at the level of 95-90 thousand. dollars, and then we can start talking about a rebound. Until then, there is no reason to over-analyze. From a fundamental standpoint, the market is overreacting to what Powell is saying and not really listening. Only because of forecasts of interest rate cuts,” he writes.

Balo (@btcbalo), another cryptocurrency analyst, emphasizes the importance of the $0.26 level. He emphasizes that Dogecoin “still has a few days to save the week,” indicating that a weekly close above this threshold would maintain a structurally sound market framework.

A successful defense of the $0.26 zone could set the stage for a renewed uptrend, potentially targeting a return to $0.42, which Balo sees as a critical turning point. A recovery of $0.42 would allow DOGE, in his opinion, to “teleport” towards the $4 mark, which he associates with a full-scale recovery.

The third analyst, CEO (@Investments_CEO), provides a historical perspective, suggesting that DOGE’s current pattern is consistent with its multi-year cyclicality. “DOGE appears to be adjusting to its typical 3-4 year cycle. Zoom out,” he says.

Analyst refers to the DOGE price action following the fractal of the previous cycle. In 2021, Dogecoin experienced its first major rally, approaching an all-time high (ATH). After a 50% correction, DOGE resumed its gains, broke through ATH, and then entered price discovery. As mentioned earlier, this scenario could coincide with the $0.26 price target.

At press time, DOGE was trading at $0.26919.

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