What Could Happen If Dogecoin Exits Its Significant Wyckoff Accumulation?

Summary:
Dogecoin, after reaching a new two-year high in 2024, has entered a bearish market phase characterized by a significant accumulation trend, known as Wyckoff Accumulation. However, recent indicators suggest that Dogecoin may be approaching the end of this trend, potentially leading to a resurgence in its price. Analyst Trader Tardigrade outlines the phases of this cycle, hinting at a bullish future for the meme coin.

Key Takeaways

Dogecoin is currently in a Wyckoff Accumulation phase that has kept its price suppressed.
Analyst Trader Tardigrade believes Dogecoin is nearing a potential breakout, having completed Phase C of the accumulation cycle.
If the current price bottom is established, Dogecoin could exit the accumulation phase, which began in 2024, leading to bullish momentum.
The next phases (D and E) could see Dogecoin pushing above key resistance levels, with the potential to reach new yearly highs.
Dogecoin's open interest has dropped, indicating a favorable buying opportunity for investors.

Dogecoin

Understanding the Wyckoff Accumulation Phase

Currently, Dogecoin is experiencing a significant Wyckoff Accumulation, which has largely kept its price down, according to crypto analyst Trader Tardigrade. However, there is optimism for the meme coin if it can break free from this accumulation trend.

Tardigrade alludes to the 5-Phase theory, suggesting that Dogecoin may be preparing to break out after finishing Phase C of the cycle. This phase is characterized by being the lowest point in the cycle, so its completion may indicate that Dogecoin's price is approaching its bottom.

Should this bottom form at the current level, it could mark the end of the Wyckoff Accumulation that seems to have commenced in 2024. Conclusively finishing this year-long accumulation would lead to bullish conditions, potentially pushing Dogecoin's price beyond initial expectations.

Dogecoin price
Source: X

As we look at the final two phases of this theory—Phase D and Phase E—Tardigrade forecasts the following:

In Phase D, Dogecoin's price may bounce back toward a resistance level above $0.16, a previously challenging point to exceed. The concluding phase, Phase E, holds the promise of the most aggressive upward movement, potentially elevating Dogecoin's price into new yearly high territory. This final phase is seen as a critical step in breaking out of the accumulation range, particularly above the $0.29 to $0.30 levels, signaling a substantial shift away from the Wyckoff Accumulation.

Interestingly, Dogecoin's open interest has seen a significant decline, nearing yearly lows. This decline points to an opportune moment for buyers to consider investing in the meme coin. Current data from Coinglass indicates that open interest sits at $1.3 billion, significantly less than its all-time high of $6 billion, positioning DOGE for a potential major breakout as the overall cryptocurrency market begins to rebound.

Dogecoin price chart from Tradingview.com
DOGE fluctuates amid market movements | Source: DOGEUSDT on Tradingview.com