In recent technique analysis by popular crypto analyst Big Mike (@Michael_EWpro), the likelihood of a substantial rise in Dogecoin (DOGE) has been highlighted. Employing a mix of Elliott Wave theory, Fibonacci retracement levels, and crucial indicators like the RSI and MACD, the analysis presents a bullish scenario that could greatly influence Dogecoin’s market position.
Why Dogecoin Could Skyrocket 440%
The three-day chart of Dogecoin, traded on Binance, displays a complex structure that suggests the application of the Elliott Wave theory, which is essential in predicting price movements based on investor psychology and momentum. The chart indicates the end of a corrective phase and the beginning of a potential strong uptrend.
The Elliott Wave pattern on the chart identifies several crucial phases. Wave 1 started at a base level below $0.08, marking the beginning of the bullish momentum, and peaked at $0.2196.
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Next, the chart shows a corrective phase characterized by an ABC pattern. This pattern is fundamental in Elliott Wave theory, representing a market correction after an initial price increase. Here, 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 conclusion of Wave 2.
This corrective phase is vital as it sets the foundation for the expected bullish Wave 3. However, Big Mike predicts that Wave 2 could push the Dogecoin price down to $0.1032 (which represents the peak of a higher Wave 1) before Wave 3 begins.
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 as it marks the peak of wave 1 and a strong resistance point that could influence future price reversals.
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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 crucial role if the bullish Wave 3 develops as predicted.
Historically, the third wave in Elliott Wave theory is often the most dynamic and extensive, indicating substantial upside potential for DOGE. This wave aims to challenge and possibly surpass long term resistance levels. Big Mike speculates that wave 3 could reach near the 1.414 Fibonacci extension level.
A potential wave 4 could see a pullback to $0.3208 (Fibonacci level 1.0), while wave 5 could take Dogecoin’s price to $0.6723, representing a 440% increase from current levels. Notably, this is also the peak of the upper wave 3.
The Relative Strength Index (RSI), currently below 50, suggests a neutral stance for DOGE, indicating potential for an upward move as market sentiment shifts towards buying. The Moving Average Convergence Divergence (MACD) is approaching a bullish crossover, often signaling an increase in bullish momentum. This indicator is fundamental, as it can validate the beginning of the strong projected upward trend.
At the time of writing, DOGE was trading at $0.1248.
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Featured image created with DALL·E, chart from TradingView.com