Henrik Zeberg, a prominent macroeconomist known for his expertise in business cycles and the Head Macro Economist at Swissblock, has released a technical analysis for the Dogecoin price, responding to popular demand. In the monthly chart of DOGE/USD, Zeberg points to potential future prices based on Fibonacci extensions and a chart pattern known as the “Rounding Bottom.”
Zeberg’s analysis heavily relies on the historical performance of Dogecoin, suggesting that its price might follow a bullish trajectory mirrored in previous cycles. He notes, “DOGE seems to develop a Rounding Bottom structure in each Cycle. We observe how each cycle has produced higher and higher levels into the Euphoria phase.”
The Rounding Bottom is a recognized chart pattern in financial markets, signaling a reversal or a significant shift from a downward trend to an upward trend. Known for its gradual, rounded recovery from a low point, the pattern resembles a bowl or saucer shape. This indicates a slow and steady accumulation phase among buyers, followed by a gradual increase in price and demand.
The formation of a Rounding Bottom begins when the asset hits a new low and then slowly starts to recover, with buyers gradually entering the market. Initially cautious of the downtrend, they gain confidence as prices stabilize. As the asset’s price ascends, it reflects increased buying pressure and a reduction in selling pressure, suggesting a market sentiment shift from bearish to bullish.
To confirm a Rounding Bottom, the price must break through the resistance level that initially led to the pattern’s formation, often marked by the highest point of the curve before the asset’s price began to fall. For Dogecoin, this resistance level is around $0.49, which Zeberg identifies as the first price target.
A breakout typically needs to be accompanied by an increase in volume and can signal a long-term bullish trend. If DOGE manages to break this resistance in the coming days, the future could indeed be massively bullish.
Zeberg utilized Fibonacci levels to provide specific future price targets for Dogecoin. Fibonacci extension levels marked on the chart for Dogecoin include the 1.27 Fib at $0.4924, labeled by Zeberg as target 1 with a potential gain of 75%. The next price target for Dogecoin is the 1.618 Fib at $0.08030, referred to as target 2, with an anticipated increase of 180%. The 2.618 Fib at $3.2738 is marked as target 3, aiming for an ambitious 8x increase.
Moreover, the 3.618 Fib at $13.3641 and 4.618 at $54.4064 are also marked, albeit not linked to immediate targets, indicating very optimistic long-term possibilities should the market enter another phase of euphoria similar to past cycles.
In discussing these targets, Zeberg cautions, “Could we see even more crazy development? Nothing is certain – but the setup looks like a repetition of what we have seen in earlier phases.” This statement refers to Zeberg’s main target for this bull run, positioned between the 3.618 and 4.618 Fibonacci levels at $29, assuming the entire market remains in a mania phase for an extended period. In this scenario, Dogecoin would achieve a gain of 10,200%.
At the time of reporting, DOGE traded at $0.41.
