Dogecoin (DOGE) has seen significant price fluctuations recently. After a sharp decline from over $0.21 to below $0.191, the coin briefly rebounded to around $0.20. Despite a 3.9% drop over the past 24 hours, Dogecoin has posted a 7-day gain of 8.0%. However, when looking at its longer-term performance, DOGE has faced declines of 20.9% over 14 days and 24.1% over 30 days. Yet, despite these dips, analysts suggest that a major price movement could be on the horizon.

Elliott Wave Theory Suggests a Bullish Phase Ahead

One analyst on X (formerly Twitter) has used Elliott Wave Theory to analyze Dogecoin’s price action and has identified a possible path for future gains. The Elliott Wave Theory is a technical analysis tool that suggests price movements follow a repeating pattern of waves. These waves are typically broken into impulse waves (1, 2, 3, 4, 5) and corrective waves (A, B, C).

According to the analysis, Dogecoin has likely completed its corrective phase (Wave 2), and it’s now entering the early stages of Wave 3. This upcoming wave (3) could be highly significant, potentially marking the beginning of a strong bullish trend.

The recent price dip aligns with a retracement around the 0.618 Fibonacci level, a key technical indicator that suggests the corrective phase may be nearing its end. If Dogecoin breaks out from this zone, it could validate the start of Wave 3 and indicate a surge in momentum.

Medium to Long-Term Price Projections

Based on the 1.618 Fibonacci extension of Wave IV, the analyst has projected that Dogecoin could see a surge of $3.17, potentially pushing its value to around $3.37 in the medium term. This aligns with the broader Elliott Wave structure, which indicates the possibility of an even more dramatic price move over time.

Longer-term projections suggest that Wave 3 could carry Dogecoin’s price to as high as $8.50, a significant jump from its current levels. This forecast has caught the attention of many Dogecoin investors, as it offers the potential for massive gains.

Key Support and Resistance Levels for Dogecoin

In addition to Elliott Wave analysis, independent market analyst Ali Martinez also provided insights into Dogecoin’s potential future performance. Martinez highlights that Dogecoin remains within an ascending parallel channel, indicating a generally bullish trend despite recent short-term fluctuations.

At the moment, DOGE is hovering near a crucial support level around $0.16. If the price manages to hold above this level, it could trigger a rebound towards $2.74, a target that aligns with the mid-channel point. This projection is also supported by the 1.272 Fibonacci extension on Dogecoin’s weekly chart.

However, before this potential rally can take place, DOGE must first overcome key resistance levels. Currently, immediate resistance sits at around $0.56958, which corresponds to the 1.00 Fibonacci level. If Dogecoin can break through this resistance, it could pave the way for a rise toward higher levels.

Challenges on the Road to Higher Levels

Dogecoin’s path to higher price targets may face some resistance along the way. As of the latest data, DOGE was trading at $0.203, showing a 15% drop in the last 24 hours. This short-term decline highlights the potential volatility that could affect the coin in the immediate future.

For Dogecoin to reach its mid-channel target of $2.74, it must first surpass the aforementioned resistance at $0.56958. If bullish momentum picks up, the next target could be the upper boundary of the channel at $6.24, which corresponds to the 1.414 Fibonacci extension and is considered a strong resistance level.

Conclusion: Can Dogecoin Reach $8.50?

Dogecoin’s price has experienced some turbulence in recent weeks, but technical analysis, particularly the Elliott Wave Theory, suggests that the coin could be gearing up for a powerful rally. If the coin breaks out of its current correction phase, it could potentially soar toward $3.37 in the medium term and even reach $8.50 in the long term.

However, it’s important to note that this analysis is based on technical patterns, and cryptocurrency markets are inherently volatile. While the potential for massive gains exists, Dogecoin investors should remain aware of the risks involved, as price fluctuations can be unpredictable. The coming weeks could be crucial for DOGE, as it navigates through support and resistance levels to determine its next big move.