Time to Sell Dogecoin? Crypto Veteran Warns of 70% DOGE Price Crash

Dogecoin's recent price drop, exceeding 17% to around $0.21, has sparked concern among investors. Crypto analyst Ali Martinez highlighted several troubling indicators in his recent chart analysis.

Technical Analysis Suggests Potential Downside

Martinez's analysis reveals Dogecoin's long-term price movement within an ascending channel since approximately 2015. This channel, characterized by periodic rallies and corrections, held until Dogecoin's parabolic surge in 2021, exceeding $0.70 before a significant retracement. Following the 2021 peak, Dogecoin fell back into the channel, entering a prolonged sideways accumulation phase between $0.05 and $0.10. A recent breakout towards $0.50 faced strong resistance, resulting in a current pullback.

Fibonacci retracement levels are particularly concerning. Dogecoin's breach of the 0.786 level (approximately $0.1978), previously acting as both resistance and support, indicates increased downside risk. Further decline could target the 0.618 level (around $0.0958), a historically significant retracement level. A worst-case scenario might see a retracement to the 0.5 level (approximately $0.0316), aligning with major accumulation periods preceding the 2021 rally. While less likely in the short term, a complete retracement could potentially reach the 0.236 level (about $0.0059).

The ascending channel suggests a long-term uptrend, despite price fluctuations within its boundaries. The horizontal support zone around $0.13 is crucial, aligning with previous higher lows and structural support. Conversely, potential resistance areas, should an uptrend resume, are indicated at $0.50, $1.00, $4.10, $10.04, and $36.32 based on Fibonacci extensions.

Martinez cautions that a drop below $0.19 significantly increases the probability of a deeper correction towards $0.06. This aligns with the technical analysis, as $0.19 corresponds to the 0.786 Fibonacci level. Breaking this level opens the door for lower retracement targets, with the next key support between $0.07 and $0.06, coinciding with historical accumulation phases.

Declining Dogecoin Network Activity Raises Further Concerns

Martinez's on-chain analysis reveals a worrying trend. On November 21, 2024, Dogecoin had 1,292,770 new addresses and traded at $0.3868, reflecting high network activity at a relatively strong price point (approximately 2.66 million total active addresses).

From December 2024 to February 2025, active addresses steadily decreased. By February 23, 2025, new addresses plummeted to 30,815, and total active addresses fell to 130,282—a 95% decline from November. While the price also declined, it didn't mirror the dramatic drop in active addresses. The significant reduction in active addresses suggests decreased user engagement and transaction volume, often interpreted as a bearish signal.