Technical analysis shows that Dogecoin is looking to break out from a key structure zone near $0.26, which could cause a change in market momentum. This technical outlook comes amidst a bearish week for DOGE, which has seen it breaking below support levels and erasing its gains throughout January.

According to a technical analysis of the TradingView platform, Dogecoin is about to break out of a robust pattern that could send it on further price increases.

Breakout From Structure Zone, Dogecoin To Rise Above $0.33

Crypto analyst Klejdi Cuni highlighted on TradingView that Dogecoin has moved beyond a robust structure zone, which theoretically opens the door for further price gains. According to the analysis, which is based on DOGE’s price action on the 4-hour candlestick timeframe, the asset had been consolidating in a robust zone between February 5 and February 10 before eventually breaking out of the upper trendline of this zone. 

Notably, this zone arose after the meme coin’s decline between February 1 and February 3, which saw it break below $0.22 for the first time since November 2024. This decline was then followed by a brief recovery before Dogecoin eventually settled and started consolidating between $0.23 and $0.26. 

According to crypto analyst Klejdi Cuni, this consolidation zone was a robust one. At the time of his analysis, Dogecoin managed to break above the upper trendline of this robust zone, with the analyst noting that it looked solid and a breakout might be next. 

However, Cuni cautioned that while Dogecoin has breached this key level, the breakout might not immediately follow through with strong upward momentum. He pointed out that a temporary pause is possible as investors await the testimony from Federal Reserve Chair Jerome Powell, which could influence broader market sentiment before Dogecoin’s next potential move.

Short-Term Price Targets And What Needs To Happen Next

The analyst identified price targets at $0.286, $0.311, and $0.335 after the breakout is confirmed. Breaking above these targets in quick succession will open up the stage for another strong move above $0.335. However, looking at these, they are short-term price targets for Dogecoin in light of a bearish price action in the past two weeks. DOGE had already even traded above these price targets throughout last month, but this is the reality now, given the decline since the beginning of February. 

Despite the lack of immediate bullish momentum, Dogecoin has not entered a full-fledged bear market. Many investors are on standby and watching for signs of renewed strength before making their move. 

Long-term bullish targets, including the widely speculated $2 level, are still in play as long as Dogecoin can hold above the strong support level at $0.2. 

At the time of writing, DOGE is trading at $0.2536, down by 5.3% in the past 24 hours.

Featured image from iStock, chart from Tradingview.com

The long-awaited US CPI inflation for January comes in hotter at 3% on a year-over-year (YoY) basis, up from the 2.9% noted in the prior month. This hotter-than-anticipated inflation figure has sparked market concerns over a potential crypto market crash ahead. Notably, digital assets have faced immense volatility lately due to macroeconomic concerns and the Fed’s hawkish stance which has weighed on the investors’ sentiment.

US CPI Inflation Comes In At 3%

In the latest development, the Labor Department reported that the US CPI inflation comes in at 3%, up from the prior month’s reading of 2.9%. On a monthly basis, the inflation rises to 0.5% in January, up from the 0.4% spike noted in the prior month. Notably, both these data come in hotter than the market expectations.

Simultaneously, the Core CPI, which excludes the food and energy prices, came in at 0.4% last month, up from the prior month’s figure of 0.2%. On the other hand, the core US CPI on a YoY basis soars to 3.3% as compared to December’s figure of 3.2%. Wall Street was expecting the Core CPI to come in at 3.1% on a YoY basis and 0.3% on a monthly basis.

These hotter-than-expected figures have added pressure on the investors’ sentiment who were already trading cautiously due to broader macroeconomic concerns. Notably, the Federal Reserve has provided a hawkish tone recently with their rate cut plans, which has already dampened market momentum.

Now, this spike in US CPI data, while the market was expecting the cooling inflation figures, has further led investors to panic. Besides, it would also provide more space for the central bank to move ahead with its hawkish plan.

Crypto Market Retreat After US CPI Release

Following the US CPI release by the Labor Department, the crypto market faces a massive selloff. The global crypto market cap fell more than 3.3% to $3.1 trillion. BTC price fell sharply by around 3% to $94,000 from the $96,488 level within minutes after the release.

This indicates how this gloomy data has impacted the market sentiment. Notably, the inflation woes have long impacted the market sentiment, forcing many to stay on the sideline. However, with the cooling US Job data from last week, the market was expecting cooling inflation figures this week.

Meanwhile, the CME FedWatch Tool showed that the US Federal Reserve is likely to keep the interest rates unchanged at their next gathering. Furthermore, Fed Chair Jerome Powell also hinted recently that the central bank would move very cautiously with their policy rate plans, which has dampened the market sentiment.

Traders have also moved their projections about a Fed rate cut in October to December, a development that further presents a bearish outlook for the market since investors are less likely to allocate more capital to cryptocurrencies with no rate cut in sight. However, despite the Fed’s reluctance, US President Donald Trump continues to pressure the Central Bank to lower rates, although it remains to be seen if Powell and the committee will listen.

What’s Next For The Crypto Market?

The crypto market has remained volatile lately due to the absence of any positive catalysts in the market. Besides, this recent US CPI data has further weighed on the traders’ sentiment, indicating further declines ahead. Notably, the US 10-year bond yield rose 2.05% to 4.630 following the release. On the other hand, the US Dollar Index was up 0.42% to $108.290.

Having said that, it appears that the selling pressure is likely to continue ahead. However, the market will now keep close track of the upcoming US PPI inflation data scheduled for tomorrow. If the PPI also comes in tandem with the US CPI, it might trigger a potential crypto market crash ahead.

Besides, market experts also expect a downturn momentum ahead for the crypto market. In a recent X post, analyst Mister Crypto highlighted the recent US CPI release and said that this is “Bearish For CRYPTO.”

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Rupam Roy

Rupam is a seasoned professional with three years of experience in the financial market, where he has developed a reputation as a meticulous research analyst and insightful journalist. He thrives on exploring the dynamic nuances of the financial landscape. Currently serving as a sub-editor at Coingape, Rupam’s expertise extends beyond conventional boundaries. His role involves breaking stories, analyzing AI-related developments, providing real-time updates on the crypto market, and presenting insightful economic news.
Rupam’s career is characterized by a deep passion for unraveling the complexities of finance and delivering impactful stories that resonate with a diverse audience.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.