In a recent technical inspection analysis by popular cryptocurrency analyst Big Mike (@Michael_EWpro), attention was drawn to the likelihood of a significant augment in the price of Dogecoin (DOGE). Using a combination of Elliott Wave theory, Fibonacci retracement levels, and key indicators such as RSI and MACD, the analysis presents a bullish scenario that could significantly impact Dogecoin’s market stance.
Why Dogecoin Could Skyrocket 440%
The three-day chart of Dogecoin listed on Binance has a convoluted structure that suggests the apply of Elliott Wave theory, which is necessary to predict price movements based on investor psychology and dynamics. The chart indicates the end of the corrective phase and the beginning of a potentially powerful uptrend.
The Elliott Wave pattern on the chart indicates several key phases. Wave 1 began at a base level below $0.08, marking the beginning of bullish momentum, and peaked at $0.2196.
The graph then shows a corrective phase characterized by an ABC pattern. This pattern is key to the Elliott Wave theory and represents a market correction after an initial price augment. In this case, Wave A begins the correction with a decline to $0.1189, followed by a slight upward pullback in Wave B to $0.17, and then a more significant decline in Wave C, setting the stage for the conclusion of Wave 2.
This corrective phase is crucial as it sets the stage for the expected bullish wave 3. However, Big Mike predicts that wave 2 could see Dogecoin price decline to $0.1032 (which is the high of the higher wave 1) before wave 3 arrives.
The Fibonacci retracement tool is used to identify potential future support or resistance levels. In this analysis, the 0.618 Fibonacci level at $0.2196 is particularly significant because it marks the top of wave 1 and a powerful resistance point that could influence future price reversals.
The analysis also identifies potential long-term resistance levels at 1, 1.414, and 1.618 Fibonacci extensions, priced at $0.3208, $0.4839, and $0.5925, respectively. These levels could play a key role if the bullish wave 3 develops as predicted.
Historically, the third wave in the Elliott Wave Theory is often the most active and comprehensive, indicating significant upside potential for DOGE. This wave is designed to challenge and eventually break out of long-term resistance levels. Big Mike speculates that wave 3 could reach the 1.414 Fibonacci Extension level.
A potential wave 4 could pull back to $0.3208 (1.0 Fibonacci level), while wave 5 could take Dogecoin price to $0.6723, a 440% augment from current levels. It is worth noting that this is also the high of the higher wave 3.
The Relative Strength Index (RSI), currently below 50, suggests a neutral stance for DOGE, indicating the potential for an upside move as market sentiment shifts toward buying. The Moving Average Convergence Divergence (MACD) indicator is approaching a bullish crossover, often signaling an augment in bullish momentum. This indicator is key as it can confirm the start of a powerful uptrend in the forecast.
At the time of going to press, DOGE shares were priced at $0.1248.
Featured image created with DALL·E, chart from TradingView.com
