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.
Based on the Fibonacci extension indicator, I have identified the 1.618 level as the main target for this cycle. This is because Dogecoin has broken through this Fibonacci level in the past two cycles when rebounding from the lows of the bear market. So, historically, Dogecoin has always been able to break through this position in the bull market.
From the figure below, we can see that Dogecoin once rebounded on a stable support level, which is consistent with the characteristics of a bear market, and then rose strongly, with the K-line breaking through the high point of the previous cycle. Now, the third cycle is also advancing according to this rule.
However, when Dogecoin tried to break through the previous high of $0.7316, it encountered strong resistance, especially in early December, when the price fell to around $0.475 several times and then entered a correction phase.
As of now, the price of Dogecoin is $0.316, which has fallen 50% compared to the price on December 8 and 12.5% in the past week.
Nevertheless, based on historical patterns, there is a high probability that the price of Dogecoin will rise again, break through the Fibonacci extension level and set a new high.
Dogecoin price will exceed $2.8
Dogecoin’s price has been moving in a very regular pattern, rising from the bear market trough all the way through key Fibonacci extension points, especially the 1.0 and 1.618 levels.
The key now is to break above the 1.0 Fibonacci Extension level at around $0.569. If so, Dogecoin bulls can start to attack the previous all-time high.
If the trend continues in the previous pattern, Dogecoin has a great chance to break through the 1.618 extension level, and the price may soar to around $2.28. After that, Dogecoin has a high probability of continuing to rise and hitting higher price levels.
