In the past month, Dogecoin (DOGE) has experienced a strong upward trend. Since late April, DOGE has climbed from $0.164 and reached an intraday high of $0.259 on May 11, with a cumulative increase of over 35%. However, after reaching the peak, the price of this meme coin began to retreat, and as of now, the price has fallen to around $0.228, with a market capitalization maintained at around $34 billion, down about 69% from the 2021 peak.
Although statistically, this round of correction is still considered mild, the recent price has been exhibiting a trend of 'lower highs,' prompting the market to reassess the nature of this rise. The core concern for investors is whether this rise since April signifies the start of a new trend or is merely a rebound within a larger corrective wave.
Technical structure exposes concerns: Can the three-wave rebound be sustained?
Technical analyst More Crypto Online pointed out in his latest analysis that, structurally, DOGE's recent rise lacks the five-wave momentum required for a sustained increase. He emphasized in the video: 'Like many other cryptocurrencies, DOGE's structure showed a three-wave rebound during the mid-May surge.' This indicates insufficient upward momentum, and technically, it is closer to a corrective phase rather than a trend-driven rise.
He further pointed out that from the perspective of Elliott Wave Theory, the rise of DOGE from $0.164 to $0.259 does not conform to the typical five-wave impulse pattern; instead, the recent price has initiated a 'mini five-wave downward' trend. This structure suggests that DOGE's rise may merely be part of a larger ABC corrective wave's 'B wave.'
The analyst clearly stated: 'Once the price breaks below $0.21, we can confirm the start of the C wave decline, with the correction target area falling between $0.199 and $0.183, derived from the 38.2% to 78.6% Fibonacci retracement levels based on the previous rebound.'
Phased rebounds are still possible, but risks remain dominant.
Although analysts have expressed cautious views on DOGE's medium-term trend, he also acknowledged that the price may experience a 'second wave rebound' in the short term within the C wave. The rebound target range is between $0.233 and $0.247, which is the initial resistance area formed in this round of movement. If DOGE can consistently hold above $0.247 on the hourly chart, it may challenge higher targets and even continue the previous upward trend.
However, he emphasized that this bullish structure is still under the judgment of a 'corrective rebound' and is not a strong trend upward. 'Only when the closing price on the chart consistently stays above $0.247 can it be considered a signal for trend continuation.' Otherwise, if the price fails to effectively hold this position and breaks below the red support line at $0.21, it will become a critical point for bearish confidence, and further declines to $0.19 or even $0.183 will become highly probable.
Macro factors put pressure, high beta assets face liquidity exhaustion
Not only is the technical structure unfavorable, but the macro environment is also detrimental to Dogecoin. Currently, U.S. Treasury yields are continuously rising, and traditional market risk appetite is decreasing. Additionally, Bitcoin's dominance is rising, and market funds are beginning to lean towards mainstream coins and stable assets. In this context, DOGE, as a high beta and sentiment-driven asset, faces significant impacts on its attractiveness and liquidity.
As early as January, Grayscale launched the Grayscale Dogecoin Trust, bringing some institutional attention to DOGE. However, by May, in a market with strong risk aversion, such marginal assets still struggled to escape outflow pressure.
From the perspective of market structure, DOGE's current fate largely depends on the defense of the key support level at $0.21. If this level cannot be maintained, the market will further seek support in the $0.19 region. From an optimistic perspective, only a price breakout above $0.247 could reignite bullish sentiment.
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