The price of Dogecoin is currently in a downward trend, mainly because it has entered a period of adjustment after a sharp rise in the past two months. However, from a technical point of view, as the leader of meme coins, Dogecoin still has the potential to rise in the long run.
If we take a closer look at Dogecoin’s candlestick chart over the last two weeks, through technical analysis, I believe that Dogecoin has the potential to see a gain of approximately 570%, provided that it can break through the 1.0 Fibonacci extension level.
Fibonacci extensions hint at bullish trend
Dogecoin is currently in the third critical bullish cycle in its history. If we look back at the previous two cycles, based on historical trends, Dogecoin has a high probability of rising 570% from its current price.
According to the Fibonacci extension indicator, I set the level of 1.618 as the main target for this cycle. This is because in the past two cycles, when rebounding from the lows of the bear market, Dogecoin has broken through this Fibonacci level. Therefore, historically, Dogecoin has always been able to break through this position in a bull market.
From the chart below, Dogecoin has rebounded at a stable support level, which is characteristic of a bear market, and then surged strongly, with the candlestick breaking through the previous cycle's high. Now, the third round of the cycle is also advancing according to this pattern.
However, when Dogecoin attempted to break through the previous high of $0.7316, it encountered strong resistance, especially in early December, when the price repeatedly dipped to around $0.475, and then entered a correction phase.
As of now, the price of Dogecoin is $0.316, which is a 50% decrease compared to the price on December 8, and the decline over the past week has reached 12.5%.
Nevertheless, based on historical patterns, there is a high likelihood that the price of Dogecoin will rise again, breaking through the Fibonacci extension level and setting a new high.
The price of Dogecoin will exceed $2.8.
The price fluctuations of Dogecoin are very regular, able to break through key Fibonacci extension points from the lows of a bear market, especially the important points of 1.0 and 1.618.
The key now is whether it can break through the 1.0 Fibonacci extension level of approximately $0.569. If it breaks through, the bulls of Dogecoin can start to challenge the previous historical highs.
If this trend continues according to the previous pattern, Dogecoin has a good chance of breaking through the 1.618 extension level, and the price may soar to around $2.28. After that, Dogecoin is very likely to continue rising, challenging higher price levels.
