In a recent MOT analysis by popular cryptocurrency analyst Large Mike (@Michael_EWpro), attention was drawn to the likelihood of a significant boost 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 surge 440%
The three-day chart of Dogecoin listed on Binance has a convoluted structure that suggests the application of Elliott Wave theory, which is vital for predicting price movements based on investor psychology and dynamics. The chart indicates the end of a corrective phase and the beginning of a potential forceful bullish trend.
The Elliott Wave pattern on the chart indicates several key phases. Wave 1 started with a base below $0.08, marking the beginning of bullish momentum, and reached a high of $0.2196.
The chart then shows a corrective phase characterized by an ABC pattern. This pattern is key to Elliott Wave theory and represents a market correction after an initial price rally. In this case, Wave A begins the correction with a drop 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 completion of Wave 2.
This corrective phase is crucial as it lays the groundwork for the expected bullish wave 3. However, Large Mike predicts that wave 2 could cause Dogecoin’s price to drop to $0.1032 (which is the peak 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 .618 Fibonacci level at $0.2196 is particularly crucial as it marks the top of the first wave and a forceful resistance point that could have an impact on a future price reversal.
The analysis also identifies potential long-term resistance levels at Fibonacci extensions of 1, 1.414, and 1.618, priced at $0.3208, $0.4839, and $0.5925, respectively. These levels could play a key role if a bullish Wave 3 develops as expected.
Historically, the third wave in Elliott Wave theory is often the most active and extensive, indicating significant upside potential for DOGE. This wave is intended to challenge and possibly exceed long-term resistance levels. Large Mike speculates that wave 3 could reach the 1.414 Fibonacci extension level.
A potential Wave 4 could push the price back to $0.3208 (Fibonacci level 1.0), while Wave 5 could push Dogecoin price to $0.6723, a 440% boost from the current level. It is worth noting that this is also the peak of the higher wave 3.
The Relative Strength Index (RSI), currently below 50, suggests a neutral bias for DOGE, indicating upside potential as market sentiment shifts to buying. The Moving Average Convergence Divergence (MACD) is approaching a bullish crossover, often signaling increased bullish momentum. This indicator is key as it can confirm the start of a forceful anticipated uptrend.
At the time of going to press, DOGE shares were priced at $0.1248.
Featured image created with DALL·E, chart from TradingView.com
