Dogecoin is approaching a key technical resistance zone where the 0.618 Fibonacci retracement level aligns with the value area high, a confluence that has repeatedly triggered selling pressure in recent weeks.
The meme coin’s latest rally has brought price back into this resistance region, which traders are closely watching to determine whether the market can break higher or face another rejection.
Momentum indicators are showing signs of weakening even as price climbs, suggesting the move may be losing strength and increasing the risk of a potential bull trap.
Technical analysts say rallies driven by short squeezes can push price rapidly higher but often lack the sustained demand required to break through major resistance levels.
If DOGE fails to move above the Fibonacci resistance zone and begins closing below the Volume Weighted Average Price, it could signal fading bullish momentum.
In that scenario, the market may rotate lower within its current range structure, which has defined Dogecoin trading activity for several weeks.
Range-bound markets often move repeatedly between support and resistance as liquidity shifts between buyers and sellers.
Analysts say a rejection at the current resistance level could send the price back toward the $0.08 support area unless stronger buying pressure emerges.
At the time of reporting, Dogecoin price was $0.09348.