Dogecoin Short-Term Price Prediction: Drop Before Rally

The Dogecoin (DOGE) price broke out from a long-term descending resistance line. The wave count supports the continuation of the upward movement.

The DOGE price has increased since Dec. 30 and broke out from a descending resistance line on Jan. 2. Previously, the line had been in place since the beginning of Nov. 2021. As a result, the breakout from it can lead to a sustained rally. The ongoing upward movement caused Dogecoin to become the ninth-biggest digital asset in the cryptocurrency market based on its market cap.

If the upward movement continues, the closest resistance would be at an average price $0.098, which is the 0.382 Fib retracement resistance level of the entire downward trend.

DOGE/USDT Daily Chart. Source: TradingView

Dogecoin Breaks out From Channel

The technical analysis from the short-term six-hour chart aligns with the daily time frame readings. The Dogecoin price upward movement caused a breakout from an ascending parallel channel. This is often a sign that the increase is impulsive.

While the 0.618 Fib retracement resistance rejected the Dogecoin price, it is now validating the channel as support (green icon).

On the other hand, a breakdown from the channel would indicate that the movement was corrective, and new lows will follow for the meme coin.

Dogecoin (DOGE) Channel Breakout
DOGE/USD Six-Hour Chart. Source: TradingView

Why Upward Movement Will Continue for Dogecoin

The Dogecoin short-term price prediction suggests that the DOGE price is in sub-wave four of a five-wave upward movement (black). If the count is correct, it would mean that the Dogecoin price will consolidate before eventually completing sub-wave five.

A potential target for the movement’s top is between $0.100-$0.106. The target is created by wave one’s 3.61-4.21 Fib extensions (black). It is also very close to the long-term 0.382 Fib level from the previous section.

As for the long-term Dogecoin count, it is not certain if the increase is part of a long-term wave one or wave A (white). While the first one could eventually lead to a new all-time high, the second indicates that this is a corrective rally. In any case, both counts suggest that the trend is bullish in the short-term.

A decrease below the sub-wave one high (red line) at $0.075 would invalidate this bullish DOGE price analysis. 

Dogecoin (DOGE) Wave Count
DOGE/USDT Six-Hour Chart. Source: TradingView

To conclude, the Dogecoin short-term price prediction is bullish. The price is nearing the end of its corrective wave. After this, an increase toward $0.100 would be the most likely scenario. A drop below $0.075 would invalidate this bullish DOGE price analysis.

For BeInCrypto’s latest crypto market analysis, click here.

Disclaimer

BeInCrypto strives to provide accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. You comply and understand that you should use any of this information at your own risk. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.

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