Dogecoin (DOGE) had a rough Wednesday, sliding over 3% as the dog-themed memecoin pulled back harder than most of its large-cap peers. But if you're wondering whether to write off DOGE entirely, one analyst thinks you might want to hold that thought.

Why the Decline?

The memecoin's drop wasn't happening in a vacuum. Trading volume fell 9.60% over the last 24 hours, and Dogecoin's losses outpaced other major cryptocurrencies including Ethereum (ETH), XRP (XRP), and Solana (SOL).

The timing lined up with yet another postponement in discussions around cryptocurrency market structure legislation. This proposed federal regulatory framework for digital assets keeps getting pushed back, and the uncertainty continues to weigh on sentiment. When the spot market wobbles, the derivatives market follows. Open interest in DOGE futures dropped 1.79% over the same period, according to data from Coinglass.

The Bullish Case Emerges

Here's where it gets interesting. Ali Martinez, a widely followed cryptocurrency analyst and trader, spotted an inverse head and shoulders pattern forming on Dogecoin's daily chart. If you're not fluent in chart patterns, this one typically signals a potential reversal from bearish to bullish territory.

The key level to watch is the neckline at $0.152. That's the resistance level Dogecoin needs to break through to confirm the pattern. If it does? Martinez is projecting a target of $0.186, which would represent roughly 30% upside from current levels. Not too shabby for a memecoin that's already up 22% year-to-date.

What the Technicals Say

The technical picture is a bit mixed right now. The Moving Average Convergence Divergence indicator, which tracks the relationship between two exponential moving averages (typically the 12-period and 26-period), is flashing a "Buy" signal for DOGE according to TradingView data.

Meanwhile, other indicators are sitting on the fence. The Bull Bear Power indicator, which measures the tug-of-war between buyers and sellers, showed a "Neutral" reading. The Relative Strength Index is similarly balanced, suggesting neither bulls nor bears have the upper hand at the moment.

Price Action: At the time of writing, DOGE was trading at $0.1437, down 3.09% over the past 24 hours. Despite Wednesday's pullback, the memecoin has still managed to notch a 22% gain year-to-date.