Is Dogecoin Setting Up for a Rally Similar to AMD?

Crypto analyst Cantonese Cat (@cantonmeow) suggests that Dogecoin may be mimicking the setup that AMD experienced before its rise last year. He notes that the current pullback in DOGE could present a favorable risk/reward scenario for investors.

Key Takeaways

Analyst Cantonese Cat drew a parallel between Dogecoin's current pullback and AMD's setup last year.
As Dogecoin's price decreases on low trading volume, it could indicate a better risk/reward opportunity.
The price levels indicated by Fibonacci retracement and extension charts suggest potential upside targets for DOGE.
The current market sentiment might be setting the stage for a possible rally if conditions hold.

Dogecoin AMD comparison news

Can Dogecoin Follow AMD’s Path?

According to analyst Cantonese Cat, the recent pullback in Dogecoin is beginning to resemble the setup that took place with AMD last year, rather than signaling a downward trend. In a post on Dec. 31, he explained that declining prices combined with diminishing trading volume and a lack of bullish sentiment from influencers may actually enhance the trade's risk/reward profile.

“I highlighted a similar scenario for AMD last year, and I believe the same applies to DOGE now,” Cantonese Cat stated. He emphasized that as the price decreases with lower trading volume, influencer enthusiasm wanes, leading to less public interest. This scenario may create a better risk/reward ratio for investors.

Dogecoin like AMD last year

The chart from Dec. 31 illustrates key Fibonacci retracement levels that Dogecoin is currently testing. The significant thresholds include approximately $0.373 (0.886), $0.297 (0.786), $0.202 (0.618), $0.154 (0.5), $0.118 (0.382), $0.084 (0.236), and a more substantial level near $0.049 (0). Currently, DOGE is nearing the 0.382 level around $0.118, an area closely monitored by technical analysts to determine if the pullback remains corrective or could lead to a more serious decline.

Below the price chart, Cantonese Cat has marked volume bars, with downward arrows indicating reduced participation as DOGE's price falls. According to the analyst, this combination of declining price, lower volume, and waning public excitement indicates a scenario where sellers are losing steam without drawing in aggressive new sellers.

Long-Term Price Predictions for Dogecoin

In a post from Dec. 20, Cantonese Cat outlines a broader framework, describing the previous period as a lengthy downcycle while positioning the current phase as a corrective movement rather than a new trend.

“We’ve experienced a 13-month bear market for DOGE, and I believe we are likely in a wave 2 correction ahead of a wave 3 breakout,” Cantonese Cat noted. He emphasized that the potential for this scenario is heightened by prevailing market sentiment, which doesn’t currently support such a turn.

His chart from Dec. 20 also projects ambitious target prices using Fibonacci extensions, estimating potential price levels of around $0.90 (1.272), $1.25 (1.414), and $1.99 (1.618). There are suggestions for even more aggressive targets beyond that, reaching up to $4.78 (2.0) and $8.91 (2.272).

Dogecoin Fibonacci extension levels

Cantonese Cat clarifies that these levels are not expected to materialize right away; however, the prospective "wave 3" could make the current pullback attractive from a risk/reward perspective.

Interestingly, Cantonese Cat doesn't limit his comparisons to AMD. He has also likened Dogecoin’s current situation to that of silver, extending the core idea that periods of low interest and popularity may, in fact, provide the best setups for future gains.

As of now, DOGE's price is trading at approximately $0.12.

Dogecoin price chart