Chartist Foresees Significant Decline Coming

Dogecoin experienced a decline, approaching the lower limit of its monthly range, as independent analyst Quantum Ascent provided an in-depth analysis suggesting that the meme coin is undergoing a corrective phase that might lead it to the mid-teens in cents. At around midday in Europe, the token was trading at $0.228, approximately 12% down from its peak on May 11 and experiencing slight losses throughout the day.

Dogecoin Approaches Risk Levels

While analyzing the daily chart, the expert revisited the remarkable upward movement that started on May 8, resulting in a 50% surge over three sessions. He reminded followers of the green candle from that day, stating, “It seems like we are initiating our fifth wave here.” Initially, he projected a conservative 2.36 Fibonacci extension, but Dogecoin surpassed that, indicating robust retail enthusiasm and suggesting the trend is now complete.

Quantum Ascent has updated his wave analysis, indicating that the recent surge was just the fifth sub-wave of a broader first-wave movement. He mentioned that we are currently within an ABC structure and adjusted the labels to show the current pullback. According to Elliott wave theory, the C-leg should at least be equal to the A-leg; he translated that expectation into a target of “around 20.5 cents, which corresponds to an 18.8% drop.”

Further Insights

He noted that deeper declines are not only probable but often common, as price action frequently reaches the third or fourth wave retracement levels. Analyzing the movement from early May to mid-May, he marked the 0.500, 0.618, and 0.702 Fibonacci levels, identifying a potential retracement area between 19.5 cents and 17 cents as a sensible zone for resetting the first and second waves. Conversely, a temporary halt at the 0.382 level, around 21.8 cents, would indicate a relatively minor correction.

Previous attempts to rise higher have faltered in what he referred to as the “danger zone,” between the 0.618 and 0.786 retracement levels: “We aimed to break above but failed to close, hitting just the 0.702 before reversing.” This setback denotes an imminent key threshold: “If we breach the low around 21 cents, we could likely see 20.5 cents.”

The observed price movements resemble a Wyckoff re-accumulation pattern, suggesting a buildup that may precede a breakout. However, if such bullish momentum materializes, it might take several weeks to unfold. The ongoing correction represents a larger second wave, with the anticipated third wave expected to be significant: “Macro third waves are usually substantial; that’s when we should expect considerable gains.”

Further Insights

The broader market context dampens any expectations for immediate growth. Bitcoin, having peaked earlier in its cycle, is also engaged in its own corrective phase, making Quantum Ascent predict that altcoins will likely stabilize. “It remains unclear whether this will occur rapidly in a C-wave or through gradual movements,” he stated, emphasizing the importance of monitoring volume trends and closing prices instead of focusing on intraday fluctuations.

As always, Elliott wave interpretations are subjective and traders should manage their positions according to their individual risk appetites. Despite holding the eighth-largest market cap in the cryptocurrency space, Dogecoin’s high volatility means that even small price shifts can lead to significant percentage changes.

At the time of reporting, DOGE was priced at $0.228.