Dogecoin Breaks Free from Its “Lower-Band Prison” as Daily Trend Shifts

Summary:
Recently, Dogecoin's price has surged approximately 17% since hitting lows at the end of December. This increase is being interpreted as more than just temporary price action but rather as a significant change in market dynamics. Crypto analyst Cantonese Cat highlights this transformation through Dogecoin’s Bollinger Bands, indicating potential new trends ahead.

Key Takeaways

Dogecoin's price has increased by around 17% since the end of December.
Analysts are identifying a shift in trend behavior based on Bollinger Band analysis.
The current movement indicates a possible breakout from a long period of lower-band trading.
Weekly and monthly charts support the idea of a trend reversal.
A focus on price levels is essential for determining future movements.

Dogecoin news

Dogecoin's Price Surge and Bollinger Bands Analysis

Currently, Dogecoin has experienced a price increase of roughly 17% since the low observed on December 31. According to crypto analyst Cantonese Cat, this rebound appears more significant than a simple dead cat bounce, showing signs of an actual change in market regime. The recent price action demonstrates a shift in how Dogecoin (DOGE) is trading within its Bollinger Bands on the daily chart.

This change is essential because it marks a transition from a prolonged period of pressure within the lower band to now occupying the upper half of the trading range. Often, this movement is an early indicator that trend behavior is starting to rotate, supporting the bullish outlook for the cryptocurrency.

Cantonese Cat's analysis emphasizes Bollinger Band positions instead of chasing patterns. The analyst pointed out, “DOGE daily shows a clear trend change visible after a long ride on the lower half of the Bollinger band, now indicating a distinct shift in behavior.”

Dogecoin daily chart | Source: X @cantonmeow

This change in behavior can be seen in the mechanics of the Bollinger Bands. At the time of writing, DOGE closed around $0.1405, positioning itself above the 20-day moving average near $0.1348. Previously, the price had spent considerable time leaning towards the lower half of the band. The upper band is positioned at around $0.1564, while the lower band is near $0.1132.

In the context of the analyst's observations, the moving average serves as an important "line in the sand." Maintaining a position above this level will keep DOGE in the upper half of the bands, where market behaviors typically differ from those during lower-band activity.

Broader Market Perspective: Weekly and Monthly Charts

When zooming out, Cantonese Cat's weekly analysis frames the overall structure as an Elliott Wave pattern. The latest interpretation suggests Dogecoin's movement can be viewed as a completed Wave 1 advance, followed by a Wave 2 correction. The analyst stated, “We’ve already experienced a 13-month bear market for DOGE, and this could likely be a Wave 2 correction prior to a Wave 3 surge.”

The levels indicated on the chart are precise. DOGE currently trades between the 0.382 retracement level at about $0.1177 and the 0.5 level near $0.1542. Higher retracement markers are found at approximately $0.2021 (0.618), $0.2477 (0.707), $0.2968 (0.786), and $0.3732 (0.886).

Dogecoin weekly chart | Source: X @cantonmeow

Above these, the 1.0 level is indicated around $0.4844, with extensions stretching to approximately $0.9029 (1.272), $1.2497 (1.414), $1.9934 (1.618), $4.7793 (2.0), and $8.9077 (2.272). The last figure coincides with the analyst’s projected target for this cycle, resting in the “$9 region.”

On January 9, Cantonese Cat also compared DOGE's monthly chart with the iShares Russell 2000 ETF (IWM), citing a recurring pattern in bull phases: “DOGE has typically lagged by 2-4 months behind IWM during bullish periods.” This comparison points to earlier instances where the breakout in IWM occurred prior to significant increases in the price of Dogecoin, implying that DOGE's current improvement may be a delayed response if this pattern holds.

Dogecoin monthly chart vs Russell 2000 | Source: X @cantonmeow

Overall, the immediate focus is whether DOGE can maintain its position above the daily Bollinger average (approximately $0.1348) and avoid slipping back into the previous lower trading range. To ensure further potential gains, breaking through the upper band region (~$0.1564) and the 0.5 Fibonacci retracement level ($0.1542) is crucial for the bullish outlook.

At the time of writing, DOGE is trading at $0.13674.

Dogecoin price chart
DOGE must break the 200-week EMA, 1-week chart | Source: DOGEUSDT on TradingView.com