The cryptocurrency stabilized slightly on Wednesday after two consecutive days of decline. Due to traders' expectations that Elon Musk's Dogecoin will succeed, the price of Dogecoin slightly increased. An analyst predicts that in the ongoing cryptocurrency bull market, this dog-themed token will surge to $4.20.
Analysts predict that the price of Dogecoin could reach $4.20.
In recent weeks, the price of Dogecoin has been on a strong upward trend, rising nearly 500% from August 5 to November 23. This increase aligns with the overall upward trend in the cryptocurrency industry following Donald Trump's election win and his appointment of Elon Musk to lead the Department of Government Efficiency (DOGE).
In a post on X, a prominent cryptocurrency investor and CEO with over 511,000 followers predicted that the price of DOGE would surge to $4.20 during the current cycle. If this happens, it would mean the token would rise by 976% from its current level. Given that DOGE has already increased by 160% in the past few days, such a move is possible in the cryptocurrency industry. If this occurs, DOGE's market cap would soar from the current $57 billion to over $613 billion.
To achieve this, cryptocurrencies need to be in a strong bull market, which will trigger a sense of greed in the market. Additionally, the largest cryptocurrency, Bitcoin, needs to continue its upward trend. During most periods, when Bitcoin is in a strong upward trend, altcoins like Dogecoin tend to thrive.
Other cryptocurrencies have a very optimistic view on Dogecoin's price. In a post, The Cryptomist pointed out that the token is forming a descending wedge pattern. This pattern occurs when an asset forms two descending and converging trend lines. When the wedge is about to converge, it usually leads to a strong breakout.
DOGE price chart points to a potential breakout.
While the idea of DOGE's price soaring to $4.20 is exciting, the more realistic scenario is to first aim for the psychological level of $1.
The weekly chart shows that DOGE's value
has risen for six consecutive weeks and is in a long-term bullish trend. In most cases, assets tend to take a breather after such a long bull run.
The currency pair remains above the significant resistance level of $0.2278, which is the highest point since March of this year. Breaking above this point invalidates the double top pattern with the neckline at $0.0836. The currency pair is still well above the 50-week and 200-week moving averages.
If Dogecoin breaks above this month's high of $0.4790, it will rise further. This move would increase the likelihood of it reaching an all-time high of $0.7393, which is about 87% higher than the current level.
If Dogecoon breaks below the critical support level of $0.2833 (61.8% Fibonacci retracement level), this price prediction will become invalid. This move would increase the likelihood of it dropping to $0.20.