Dogecoin (DOGE) hit a new high this year on January 22, but wave analysis suggests that the initial stage of the bull run has already been completed.
DOGE: signs of a bullish trend
According to the results of technical analysis, the rate of the Dogecoin (DOGE) project has been growing since December 30. On January 2, the price made a bullish breakout of the long-term resistance line. Previously, this line was present on the chart from the beginning of November 2021. Accordingly, it can be expected that its breakdown may set the start for a sustainable rally.. In addition, the bullish breakout was reinforced by the rise in the daily RSI above 50.. This is another sign of a bullish trend.
DOGE made similar highs on January 14 and 22, although the second was recorded at a higher level. If the growth continues, the next resistance will come into play around $0.098 (Fibo level 0.382 correction of the entire downtrend).
Source: TradingView Dogecoin in February: new highs expected
However, the 6 hour timeframe paints a more bearish picture.. Here, wave analysis results suggest that DOGE has completed a five-wave bullish pattern (black). In addition, the RSI indicator has been giving bearish divergence signals (green line) for the last 24 hours, reinforcing the negative outlook.. However, it is not clear whether we are dealing with wave 1 of a longer-term five-wave bullish structure (white) or wave A of an ABC corrective structure (black).
The nature and steepness of the subsequent decline will help determine which of these scenarios is correct.
A drawdown below the bottom of sub-wave 4 (red line) and the 0.618 Fib level of a $0.077 retracement would confirm that the market has formed wave A (black). On the other hand, a bounce in Dogecoin before these levels would indicate a more bullish option with a larger five-wave bullish structure (white). This will lay the foundation for an optimistic forecast for the mem coin for February..
Absorption of the January 22 high at $0.093 would signal that DOGE is poised for continued gains without any retracement at all. Meanwhile, a breakdown of the lows from December 30 at $0.066 will completely cancel the bullish forecast.
Source: Trading View
Thus, the most likely scenario for Dogecoin for February is a rollback, followed by a resumption of growth. A break above $0.093 will signal the end of the pullback, while a fall below $0.063 will signal a continuation of the bearish trend.
In the case of the implementation of the first scenario, the token can update the highs around $0.111. In the second case, the collapse of DOGE towards the last year's lows of $0.057 is not ruled out.
Earlier, the editors of BeInCrypto said that the ADA rate has been showing active growth lately, perhaps in anticipation of the imminent launch of a stablecoin on the Cardano network.
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