- Dogecoin (DOGE) weekly chart shows a Bearish Engulfing candlestick pattern.
- Hidden bearish divergence between two crucial oscillators.
- Corrective Wave in Elliot Wave Theory points to lower prices.
Dogecoin price action is poised for a likely drop over the weekend. While there remain a couple of days left in the trading week for cryptocurrencies, the current weekly candlestick is a very bearish engulfing candlestick. Not only is it a bearish engulfing candlestick, but the present close on the weekly chart puts DOGE’s price below the weekly Tenkan-Sen.
Dogecoin bears will test $0.185 as support
The nearest support level for Dogecoin is at the $0.185 value area. Below $0.185 is the 100% Fibonacci expansion at $0.125. However, it is very likely that $0.125 may not hold as an area of solid support. If you look at the volume profile, there is a massive volume trough between $0.16 and $0.08 – almost nothing has traded in that price range.
Assuming that the all-time high for DOGE is the end of a Grand Supercycle in Elliot Wave Theory, then it is easy to project where the first ABC corrective wave will likely end. Knowing that Wave 2 is typically 50%, 61.8%, 76.4%, or 85.4% of Wave 1, the next support zone is well below the $0.125 level.
DOGE/USDT Weekly Chart
The likely endpoint for wave C is in the value area between $0.051 and $0.066. Contained within that value area is the 50% Fibonacci retracement, the 161.8% Fibonacci extension, Senkou Span A, Senkou Span B, and the 2021 VPOC. In addition, the hidden bearish divergence between the Relative Strength Index and the Composite Index points to a very high probability of Dogecoin price reaching $0.066.
Bears should not be overconfident, though. DOGE price could find support at the $0.125 range. Additionally, the bearish scenario will be invalidated if Dogecoin bulls can push price to a close above the weekly Kijun-Sen at $0.402.