Dogecoin Crashes 40%, But This Analyst Sees A Bullish Setup

In a dramatic reversal, Dogecoin (DOGE) plunged from around $0.34 as low as $0.20, wiping out nearly 40% of its value before finding tentative stability near $0.25 at press time. However, crypto analyst Coosh Alemzadeh (@AlemzadehC) maintains a bullish long-term outlook, sharing a weekly chart of DOGE/USD and remarking, DOGE: Looking really good here, despite the recent turmoil.

Why Dogecoin Is Still Looking Bullish

The unexpected news of new tariffs by the Trump administration on major trading partners like China, Mexico, and Canada on Friday has sent shockwaves across financial markets, including cryptocurrencies. The news has led to a broad sell-off in risk assets, with Dogecoin, known for its high volatility, being particularly affected. The fear of an escalating trade war has dampened investor confidence, pushing many to liquidate their positions in cryptocurrencies.

Following the tariff announcement, Dogecoin saw an immediate and significant drop, within hours of the news breaking. Over the weekend, the crypto market crash extended as part of a larger market reaction, where major altcoins like XRP and Cardano also experienced double-digit percentage losses. The entire crypto market wiped over $2.2 billion in crypto liquidations.

Alemzadeh chart, drawn on the weekly timeframe, shows DOGEs price initially breaking above a descending red trendline in October. That line has acted as a key resistance zone stretching back to previous local highs, and the ensuing retreat has brought the market right below the trendline again.

In parallel, Dogecoin is still positioned above its 30-week moving average (30w), which is plotted as a pink-dotted curve and currently sits around the $0.20$0.22 range. Analysts often regard weekly closes above this average as a sign of underlying strength, suggesting that DOGE may yet hold onto its bullish structure if the market steadies above that threshold.

The chart also highlights a series of Fibonacci retracement and extension levels, each offering insight into potential support and resistance. At the forefront is the 0.618 Fibonacci retracement around $0.2667, a critical region that the price now hovers around. This level often draws the attention of traders looking to identify whether the market is in a standard pullback or has begun a deeper correction.

Next up sits the 0.786 retracement near $0.3467. Beyond that, full retracement around $0.4843 marks a more distant objective should DOGE reclaim its bullish momentum. Even loftier extensions, indicated on Alemzadehs chart at $1.27 (1.618) and $2.30 (2.0), serve as hypothetical targets if the token achieves a major breakout.

An additional element is the Elliott Wave labeling, depicting what appears to be waves 1, 2, 3, followed by the current dip marked as wave 4 near $0.26. In traditional Elliott Wave theory, wave four commonly retraces into the 0.2360.618 zone of the previous wave, so the present price action touching the 0.618 Fibonacci point fits well with that pattern. Should DOGE confirm wave four support, the next phasewave fivecould drive the market back above former highs with the main targets being $1.27 and $2.30 if bullish sentiment returns.

At press time, DOGE traded at $0.25.

Text source: NewsBTC

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