The meme-inspired cryptocurrency Dogecoin ($DOGE) could be set to soon surge, according to a recent price analysis that combined technical indicator with Elliot Wave theory to suggest a 430% price rise.
According to popular pseudonymous cryptocurrency analyst BigMike, Dogecoin’s price rise is “loading,” based on the use of Elliot Wave theory to suggest that the five-wave pattern will unfold to take DOGE to around the $0.67 mark, up from its current $0.126 level.
The chart, according to the analysis, suggests the conclusion of a corrective phase and the potential beginning of a robust uptrend. Wave 1, signifying the initial bullish momentum, is believed to have commenced at a base level below $0.08 and culminated at $0.219.
Following this surge, the chart exhibits a corrective phase characterized by an A-B-C pattern, a common occurrence in Elliott Wave theory. This corrective phase is seen as essential, laying the groundwork for the anticipated bullish Wave 3.
Elliott Wave theory is a common tool for predicting future market fluctuations,and was developed by Ralph Nelson Elliott in the 1920s after he obersed and identified “recurring, fractal wave patterns.”
These fractal wave patterns are based on the psychology of the masses, with the Elliott Wave theory usually being interpreted based on five waves moving in the direction of a main market trend, which can be bullish or bearish, and by three corrective waves.
The repetition of these patterns, theory suggests, allows the movements of asset prices to be predicted. The theory is said to have gained notoriety when Elliott himself predicted the stock market bottom in 1935 after a 13-month correction.
The analyst sees a potential dip in DOGE’s price to $0.103 before the upswing commences.
$DOGE is loading….. pic.twitter.com/oAXqy7lDMc
— BigMike7335 (@Michael_EWpro) June 27, 2024
The analysis also incorporates Fibonacci retracement levels, which stem from the Fibonacci sequence and indicate where support and resistance are likely to be. The 0.618 Fibonacci level, at $0.219, is highlighted as a significant resistance point that could impact future price movements.
Furthermore, the analysis identifies potential long-term resistance levels at $0.320, $0.483, and $0.592. These levels could come into play if the bullish Wave 3 materializes as anticipated.
Big Mike projects that Wave 3 could propel DOGE’s price near the $0.483 mark (1.414 Fibonacci extension level). The analysis also suggests a potential pullback in Wave 4 before Wave 5 ultimately drives the price to $0.672, representing a 430% increase from current levels.
Supporting the bullish outlook, the Relative Strength Index (RSI) for DOGE which appears to suggest the meme-inspired cryptocurrency is oversold, while the Moving Average Convergence Divergence (MACD) hints at a bullish crossover, which could signal the start of a pronounced uptrend.
The analysis comes shortly after another popular pseudonymous analst suggest DOGE could be poised to “surge incredibly” as a little-known technical indictor is suggesting the cryptocurrency’s price is due for a breakout.
That prediction is based on the Gaussian Channel (GS) indicator turning green on Dogecoin’s weekly chart, which means that when the time is right Dogecoin “will surge incredibly.”
Featured image via Unsplash.
