A well-known crypto analyst, DaanCrypto Trades, says Dogecoin (DOGE) is providing a textbook example of the pattern currently shaping across the entire altcoin market. In his latest update, the trader described a five-stage structure that has unfolded on multiple charts since Friday’s sharp market sell-off.
According to Daan, the pattern began with an intense liquidation-driven dump, marked by large downside wicks as volatility spiked. That initial drop was followed by a partial recovery, retracing roughly 50% of the decline, before moving into a sideways consolidation phase. A subsequent 10-20% secondary drop across most altcoins then pushed prices to fresh local lows.
Now, in what Daan labels the fifth stage, markets are showing a mild rebound, hinting at stabilization after several sessions of heavy selling. “Most charts look the same,” he noted. “Took DOGE here as an example.”
Daan highlighted that price action will become critical once coins begin to test the highs of their initial bounce. Breaking above that range, he said, would be the first technical confirmation of a potential trend reversal.
Between those short-term highs and the top of the original sell-off lies a 15-30% inefficiency zone, an area of thin liquidity that could fill rapidly if momentum shifts in favor of buyers. Until that happens, he expects sideways “choppy” trading to dominate the market.
While near-term relief is visible, Daan warned that a break below recent lows, the fourth stage of his five-step model, would invalidate recovery hopes and invite deeper retracements. Such a move would likely fill previous wicks and reintroduce volatility across mid-cap tokens.
At the time of writing, DOGE trades near $0.19, sitting just below a resistance band between $0.20 and $0.23, which Daan identified as the inefficiency zone to watch.
With this structure repeating across major altcoins, Daan’s analysis suggests the market is at a technical crossroads. If prices reclaim their bounce highs, it could mark the start of a broader recovery phase. Failure to do so, however, risks ushering in another wave of capitulation, reinforcing just how pivotal the next few sessions may be for the entire altcoin sector.
