Despite its weak outlook in recent months, Dogecoin has come to the fore again as technical indicators give signals reminiscent of past market bottoms. Price action and momentum data have reopened the possibility of a strong move on the meme coin side.
Correction scenario stands out in the technical view
Analyst Hailey notes in her Elliott Wave analysis that Dogecoin continues to trade within an extended correction structure rather than entering a new bear trend. According to this approach, the current retreat constitutes the last leg of Wave IV in the large structure that developed after the all-time high level of DOGE reached in 2021.
Mini dictionary: Elliott Wave theory is a technical analysis approach that tries to explain market movements with repeating wave structures. In this method, analysts examine the correction and rise phases as different waves.
Dogecoin appears to remain within a broadband correction formation and continues to test critical support levels. Since the last peaks in 2024, the downward sloping trend line has been watched as the main resistance element limiting bullish attempts.
Hailey emphasizes that if the previous Elliott wave structures are preserved, the triangle formation remains the strongest scenario, and the price remains approximately 30% above the invalidation level.
According to the analysis, the Wave 4 support zone is the most critical area in terms of the long-term outlook. If this region is maintained, it is likely that the price will move towards the $1.00 to $1.10 range in the next leg of the rise. This scenario implies a potential upside of over 1,090% from the targeted low. However, it is also considered that a new horizontal compression period may occur before or after the possible rise.
RSI data shows similarity to past bottoms
Trader Tardigrade notes that Dogecoin’s weekly Relative Strength Index has returned to levels seen at the previous market bottom. RSI is known as a common momentum indicator used to measure whether an asset is approaching the overbought or oversold zone.
In the bear market of 2022, after Dogecoin’s weekly RSI data fell to similar levels, the price rose by approximately 886% and closed around $0.48. Since the current outlook is similar to this chart, the possibility of a move towards the $0.70 region is kept on the agenda if the past repeats.
Trader Tardigrade conveys that an oversold outlook alone does not mean a bullish reversal, but may indicate that the sellers are starting to lose steam.
At the same time, DOGE price is hovering close to the $0.07 support zone, which has seen strong buying interest in the past. Whether this area can be protected or not stands out as one of the determining issues in terms of short and medium term direction.
Long positions increased in futures transactions
Expert CW notes that there has been a significant increase in buy-side transactions on the BitMEX side since June 24. The amount of open interest increased from approximately 1 billion contracts to approximately 1.7 billion contracts. This chart indicates that new money is entering DOGE futures while the price is hovering near monthly lows.
| Indicator | Before | latest situation |
|---|---|---|
| open position | Approximately 1 billion contracts | Approximately 1.7 billion contracts |
| critical support | $0.07 region | Watched closely |
| Possible target range | $0.70 | $1.00 to $1.10 |
The increase in net long positions also shows that many investors are expecting an upward reaction with leverage. But this outlook also carries additional risk. If Dogecoin fails to break above resistance levels, rapid unwinding of leveraged positions could increase selling pressure.
