Dogecoin (DOGE) Struggles to Sustain Momentum as Bearish Pattern Emerges

Dogecoin (DOGE) has seen a significant bullish rally after breaking out from a descending triangle, reaching highs of $0.46.

However, the formation of a rising wedge and bearish divergence signals a likely correction as DOGE progresses into a corrective phase before it can continue moving up.

DOGE Price Analysis

The Dogecoin daily chart demonstrates a powerful bullish rally following a prolonged corrective phase within a descending triangle.

After bottoming near $0.057 in the accumulation zone, DOGE broke out decisively, completing waves (i) and (ii) before entering an explosive wave (iii), which currently shows signs of consolidation.

On Nov. 12, it reached a high of $0.44 and showed signs of weakening momentum. The uptrend persisted but only reached a slightly higher high of $0.46 on Dec. 2 before falling to $0.38 the next day. 

Since Nov. 12, a rising wedge has been formed, hinting at the potential conclusion of this uptrend. In conjunction with the bearish divergence seen on the daily Relative Strength Index (RSI), there is a strong likelihood of a coming correction. 

Key Observations

• Elliott Wave Structure: The price is advancing through wave (iii), with a corrective wave (iv) anticipated before targeting higher levels in wave (v).
• Rising Wedge Formed: These patterns usually indicate the uptrend’s completion as momentum slows. 
• RSI Divergence: The RSI shows a bearish divergence while remaining in overbought territory, signaling the potential for a short-term correction.

The broader trend remains bullish, but holding key support near $0.35 is crucial for maintaining momentum into wave (v). Resistance at $0.45 and $0.50 will likely determine the next significant move.

DOGE Price Prediction

The hourly chart suggests that the price is undergoing a corrective wave (iv) within a larger Elliott Wave structure.

After reaching a local high of $0.477, DOGE has shown signs of consolidation within a descending ABC corrective pattern, indicating the possibility of a near-term retracement to lower Fibonacci levels.

A few possibilities are ahead, but a breakout above the current consolidation range would confirm the most likely scenario.

Either way, the transition into wave (v), with the next bullish leg targeting higher resistance levels, would be expected, as the current weakness is seen as a corrective stage. 

Key Levels to Watch

Support Levels:

• $0.387 (0.236 Fibonacci): Immediate support level within the corrective phase.
• $0.332 (0.382 Fibonacci): A key level to hold during wave (iv) correction.
• $0.287 (0.5 Fibonacci): Strong support zone to maintain the broader bullish structure.

Resistance Levels:

• $0.412: Current trading level, key for confirming upward movement.
• $0.477: Recent high and resistance marking the wave (iii) peak.
• $0.525: Projected wave (v) target and psychological resistance.

A sustained drop below $0.287 could challenge the bullish momentum, while a decisive breakout above $0.477 would confirm the continuation of the uptrend into wave (v).

About the Author

Nikola Lazic

Nikola Lazic is a cryptocurrency analyst and investor working in the industry since 2017. He holds a bachelor's degree in Sociology, which enables him to better understand the psychology behind the crowd´s positioning. Consequently his preferred analytical tool is Elliott Wave Theory in combination with price action analysis.

Combining his experience in trading and investing with knowledge in content writing he strives to bring the most accurate and actionable information.

Expertise: Cryptocurrencies, Technical analysis, Elliott Wave Theory, On-chain metrics, Research reports.

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