The Dogecoin price is currently trading within a bearish setup as it continues to undergo correction following a remarkable price surge in the past two months. Nonetheless, technical analysis suggests that the leading meme coin is still trading in a bullish setup on the larger timeframe.
In a technical analysis of Dogecoin’s price movement on the 2-week candlestick chart, crypto analyst Javon Marks noted a looming 570% rally for DOGE, which is contingent upon a break above the 1.0 Fibonacci extension level.
Fibonacci Extension Indicates Bullish Momentum
According to a Dogecoin technical analysis posted on social media platform X by Javon Marks, the Dogecoin price is currently in the midst of its third major bullish cycle since its creation. Drawing parallels from Dogecoin’s historical price action during its previous two bullish cycles, Marks suggests that the cryptocurrency is well-positioned to go on a 570% increase from its current price.
Using the Fibonacci extension indicator, he pinpointed the 1.618 level as the first important bullish target this cycle. This is because the last two cycles have been highlighted by a break above this Fib level when projected from the low of the preceding bearish phase. As such, Dogecoin has surpassed this level during each of its past bull runs.
According to the chart below, the bearish phases have been highlighted by Dogecoin bouncing off a relatively constant support level. This price action is then followed by strong bullish candles that break above the previous cycle’s all-time high.
The current (third) Dogecoin cycle is currently playing out the same way. However, the meme coin seems to have faced a notable resistance level on its way to reclaiming the previous cycle’s all-time high of $0.7316. Particularly, the Dogecoin price encountered multiple rejections around $0.475 in early December, which has culminated in a correction path since then.
At the time of writing, Dogecoin is trading at $0.316, which translates to a 50% price decline since December 8. Furthermore, data from Coinmarketcap shows that the leading meme coin is currently down by 12.5% in the past seven days. Notwithstanding, crypto analyst Javon Marks suggests that history hasn’t changed and still points to a fairly high likeliness of a price run to Fib extension levels to new all-time highs.
Analysis Puts Dogecoin Price Beyond $2.8
Dogecoin’s cyclical price movements have had a defining feature of its market behavior, which is a successive break above the 1.0 and 1.618 Fib extension levels from the bearish market low. Right now, the bearish momentum hinges on a break above an initial break above the 1.0 Fib extension level, which is situated around $0.569. Breaking above this level would open up the stage for Dogecoin bulls to challenge its current all-time high.
If the current cycle follows the trends from the previous cycles, Dogecoin could break past the 1.618 Fibonacci extension, which would put it at least around $2.28. From here, the Dogecoin price could continue on a bullish momentum and move into other price milestones.
Featured image created with Dall.E, chart from Tradingview.com
