Dogecoin has gradually lost momentum, creating a sense of unease among traders about its future trajectory. Recently, a notable analyst employing the Elliott Wave theory has put forth a long-term perspective indicating that Dogecoin may be undergoing a corrective phase. This phase could extend for longer periods than what many in the trading realm would anticipate.
The analyst suggests that the current market behavior might trace back to a significantly low point, which could represent a worst-case scenario for Dogecoin investors.
Insights on Long-Term Trends and Structures
This recent analysis reflects on Dogecoin’s structure from its soaring peak in 2021 when the cryptocurrency reached an impressive $0.73. Currently, the review indicates that the price movements since then have been caught in a lengthy corrective process, resembling a wave pattern that initiated in May 2021. The extended phase of sideways action has resulted in overlapping configurations, similar to an A-B-C correction seen in complex Elliott Wave formations.
Additionally, the analyst pointed towards a potential leading diagonal formation that might have started in late 2023. These leading diagonals can signify the onset of a new impulsive cycle but are often accompanied by steep corrections before the primary trend can resume. It’s noted that Dogecoin has already reached the 0.5 Fibonacci retracement level, while another significant support zone lies nearby at the 0.618 level.
Support levels around $0.15 to $0.17 have been staunchly defended by Dogecoin enthusiasts, yet technical projections hint at the potential for a more substantial downturn. In this case, the dire scenario could lead to a revisit of the single-digit cents territory, notably around the 0.618 to 0.786 levels of Fibonacci retracement as illustrated in the related chart.
This outlook hinges on a possible retest of the lower extremities of a long-term channel, a movement that might finalize a sub-impulse wave or lead to a last leg below $0.10 before any new bullish wave emerges.
Understanding the Bullish Potential Following Corrections
Though the prospect of Dogecoin slipping below $0.10 may appear unlikely for many traders, especially since it has strategically maintained the $0.15 to $0.16 bracket, this scenario is still on the radar. If heightened selling pressure ensues, the coin is only a 33% movement away from that point.
A decline to such levels might not eliminate a long-term bullish perspective but would typically signify a concluding flush associated with late-stage corrections that began as early as mid-2021.
Conversely, should the support at approximately $0.16 hold firm, there may be potential for a rally exceeding $0.50. A decisive breach and close above this mark would invalidate the preceding fourth impulse wave analysis. As it stands, Dogecoin is currently trading at $0.1774, reflecting a modest decline of 1.9% over the last day.
