DOGE Price Analysis: Descending Wedge Breakout Could Signal the Beginning of a New Bullish Cycle

Dogecoin (DOGE) has been in a prolonged downtrend, forming a descending wedge pattern on the higher time frame. The Elliott Wave count suggests that the correction may be nearing completion as the price reaches key Fibonacci retracement levels.

Dogecoin (DOGE) has been enchained in a prolonged downtrend, forming a triple apex pattern or a descending wedge on the higher time frame. As the price approaches the apex of this pattern and the 0.786 Fibonacci retracement level, the Elliott Wave count suggests that the correction may be drawing to a close.

A breakout from this pattern could be pivotal, setting the stage for a new bullish cycle.

As the final corrective wave appears to be completing on the lower time frame, we'll examine the critical support and resistance levels that could influence the direction of DOGE in the coming sessions.

Dogecoin (DOGE) - 4 Hour Chart

From the 4-hour chart, we can observe a clear Elliott Wave structure. In December, the price completed a five-wave impulse to $0.48, followed by an ABCDE correction.

As the price reaches the 0.786 Fibonacci retracement level at $0.171, known for being a strong reversal zone, the descending wedge formation also suggests a breakout if bullish momentum increases.

We can also see that Wave E appears to be completing, coinciding with the wedge’s lower boundary and the Relative Strength Index (RSI) approaching oversold territory, setting the stage for a rebound.

However, failure to maintain support above $0.171 could result in a deeper correction toward the $0.15 region.

If there is a breakout from the wedge, the first resistance to watch will be the 0.618 Fibonacci retracement at $0.240.

A confirmed breakout above this level would indicate a potential trend reversal and could push the price toward the 0.5 retracement at $0.288, a key psychological level.

Dogecoin (DOGE) - 1 Hour Chart

On the 1-hour chart, we can observe that the price appears to be completing wave (v) of wave C within the corrective structure.

A final move lower could bring the price slightly closer to retesting the wedge support before we see a potential bullish reversal.

Now, if the buyers fail to hold the $0.171 support, then we could see a deeper decline toward $0.150, invalidating the immediate bullish scenario.

The RSI on the 1-hour chart is showing early signs of bullish divergence, suggesting that the sellers are losing momentum, which could be crucial for a reversal.

If there is a breakout, then the bullish wave (v) target could extend beyond $0.240, possibly reaching $0.260 in an impulsive wave structure.

Key Takeaways

Dogecoin (DOGE) is approaching a critical juncture, with the descending wedge pattern and key Fibonacci retracement levels suggesting a potential reversal in the higher time frame.

While the 4-hour chart suggests that the final wave of the correction is nearing completion, the 1-hour chart signals that a short-term move lower could still occur before a bullish breakout.

If DOGE manages to hold above $0.171 and breaks out of the wedge, then the price could rise toward $0.240 in the intermediate term.

However, a breakdown below $0.150 would invalidate this bullish scenario and lead to further declines.