Key Takeaways
Dogecoin (DOGE) was recovering from Dec. 20 when it fell to $0.26 on a larger wick. Since then, it formed an ascending channel to a high of $0.43 on Jan. 18.
A downturn was seen, and today, a breakout below its ascending support invalidated the previously outlined bullish projection.
Dogecoin’s 4-hour chart illustrates the completion of Wave 3 at approximately $0.48, followed by a prolonged corrective Wave 4, which has unfolded as a complex ABC pattern.
The Wave C leg has tested key Fibonacci retracement zones, including the 0.382 level at $0.36, which is now acting as resistance. Current price action has broken below an ascending channel as it has fallen over 12% since yesterday.
This suggests a bearish continuation toward lower retracement levels. We could see lower levels than $0.26 on Dec. 20, meaning that instead of assumed wave 4 completion, we now see its third sub-wave.
The Relative Strength Index (RSI) indicator on this time frame confirms weakening momentum, hovering near 40, which aligns with the ongoing correction.
Notably, the Fibonacci retracements of 0.5 ($0.285) and 0.618 ($0.238) are critical zones that may attract buyers, particularly the latter, which aligns with historical price reactions.
Despite the bearish undertone, the overall structure remains constructive, as Wave 4 corrections typically precede a final impulsive Wave 5.
The upside potential exists if the price stabilizes above $0.285, invalidating further downside.
The 1-hour chart highlights the fine-grained details of the ongoing Wave C structure within Wave 4.
The breakdown from a smaller ascending channel, coupled with the impulsive Wave (iii), suggests further declines toward 0.786 at $0.285) and 1 at $0.244 Fibonacci extensions, where Wave (v) could terminate with its higher degree wave C.
A temporary bounce within Wave (iv) may retest $0.317 (0.618 retracement of Wave (iii)), which also serves as immediate resistance.
However, this rally could remain capped if RSI momentum fails to recover significantly. Wave (v) is likely to complete near $0.24, which is the 0.618 Fibonacci retracement, providing an opportunity for bullish reversals as part of the larger Wave 5.
The RSI on this time frame indicates oversold conditions, signaling the possibility of a short-term consolidation or retracement before the final drop.
Confirmation of bullish momentum requires a decisive break above $0.36 (0.382 retracement on the 4-hour chart).
Dogecoin remains within a critical correction phase, but its wave structure and Fibonacci targets provide clear zones of interest for both bullish and bearish scenarios.