In the past month, Dogecoin (DOGE) has experienced a strong upward trend. Since late April, DOGE has risen from $0.164, reaching an intraday high of $0.259 on May 11, with a cumulative increase of over 35%. However, after hitting the peak, the price of this meme coin began to retreat, and as of now, it has fallen to around $0.228, with a market cap maintained near $34 billion, having retraced about 69% from its 2021 peak.
Although statistically this round of correction is still considered mild, the recent price trend of 'lower highs' has led the market to reassess the nature of this rise. The core concern for investors is whether this rise since April represents the start of a new trend or a rebound within a larger corrective wave.
Technical structure reveals concerns: Is the three-wave rebound unsustainable?
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 upward movement. He emphasized in the video: 'Like many other cryptocurrencies, DOGE's structure during the mid-May surge exhibited a three-wave rebound.' This indicates insufficient upward momentum, technically leaning more towards a corrective phase than a trend-based rise.
He further pointed out that from the perspective of Elliott Wave Theory, the structure of DOGE's rise from $0.164 to $0.259 does not conform to the typical five-wave impulsive pattern; instead, the recent price has initiated a 'mini five-wave decline' movement. This structure suggests that DOGE's rise may only be part of a larger ABC corrective wave in the 'B wave'.
The analyst clearly stated: 'Once the price drops below $0.21, we can confirm the start of the C wave decline, with the retracement target area falling between $0.199 and $0.183, derived from the Fibonacci retracement levels of 38.2% to 78.6% formed during the previous rebound.'
A phase of rebound is still possible, but risks remain dominant.
Although analysts have expressed cautious attitudes towards DOGE's mid-term trend, they also acknowledge that the price may experience a 'second wave rebound' in the C wave in the short term. The target range for this rebound is between $0.233 and $0.247, which is the initial resistance area formed in the current trend. If DOGE can consistently hold above $0.247 on the hourly chart, it may challenge higher targets and even extend the previous upward trend.
However, he emphasized that this bullish structure is still under the judgment of a 'corrective rebound' and not a strong upward trend. 'Only if the closing price on the chart consistently stands above $0.247 can it be seen as a signal for trend continuation.' Otherwise, if the price fails to effectively hold this position, breaking below the $0.21 red support line will become a key point for enhancing bearish confidence, making further declines to $0.19 or even $0.183 a high-probability event.
Macroeconomic factors are pressuring, high-beta assets face liquidity exhaustion
Not only is the technical structure unfavorable, but the macro environment is also detrimental to Dogecoin. Currently, US Treasury yields are continuously rising, and traditional market risk appetite is declining. Furthermore, Bitcoin's dominance is increasing, with market funds starting to favor mainstream coins and stable assets. In this context, DOGE, as a high-beta, sentiment-driven asset, is facing significant impacts on its attractiveness and liquidity.
Although Grayscale launched the Grayscale Dogecoin Trust as early as January, bringing some institutional attention to DOGE, by May, in a market heavy with risk-averse sentiment, 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 viewpoint, only a price breakout above $0.247 could reignite bullish sentiment.
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