Cantonese Cat, a pseudonymous analyst, suggests that Dogecoin’s recent six-month price consolidation indicates a forthcoming upward breakout rather than a downward trend. In a video released on June 19, he presents evidence across various time frames, predicting that the meme-inspired cryptocurrency could rise to as high as $4.13 before this market cycle concludes.
The analyst begins by discussing market sentiment, noting increasing frustration among retail investors due to Dogecoin's price decline since last autumn's peak. He argues that such discontent is typical during bull-market corrections, stating, "This is still a bull trend until proven otherwise." He emphasizes that the current sentiment reflects a necessary phase for future gains.
From a technical perspective, Cantonese Cat observes that Dogecoin is forming what he describes as a "cup and handle" pattern. The initial retracement halted near the critical 0.786 Fibonacci level, indicating strong resistance. However, he anticipated a pullback to the 0.382 level, which he considers a significant area of support, forming an "Adam-and-Eve double bottom."
On the monthly chart, Dogecoin is positioned below a dense Ichimoku cloud, having failed to break out on two previous attempts. Despite this, Cantonese Cat believes a successful third attempt is likely, interpreting the current price action as building momentum for a significant upward movement.
He highlights the presence of six consecutive monthly candles within the last substantial green candle from November, suggesting that this formation indicates an accumulation of energy for a potential breakout. This compression is echoed in the weekly time frame, where similar patterns suggest diminishing bearish momentum.
Key support is provided by a rising 20-month simple moving average, currently at $0.1737. Although the price is slightly below this average, its upward slope indicates a positive trend. Historically, such scenarios often lead to price increases, as seen in past cycles where Dogecoin rebounded after similar situations.
Cantonese Cat points out that trading volume is low, particularly in major markets like Binance, where selling pressure appears absent. He believes that the lack of selling volume indicates a supply overhang has dissipated, suggesting that a demand-driven reversal could be imminent.
Recent indicators on the daily chart support this bullish outlook. Dogecoin has formed what he refers to as a "treasure bottom," characterized by a small candle body relative to its wick, signaling potential capitulation. Notably, the relative strength index (RSI) has shown bullish divergence, with lower price lows coinciding with higher RSI readings, reinforcing the possibility of a trend reversal.
If volume increases and the price recovers through the 0.5 and 0.618 Fibonacci retracement levels, the analyst identifies potential targets of $1.60, $2.26, and $4.13, with slightly adjusted figures from aggregated data suggesting $1.50, $2.27, and $3.94. However, he dismisses the likelihood of a return to the extreme price surge seen in 2021, citing a more reasonable market capitalization range between $250 billion and $500 billion.
Cantonese Cat views the current market sentiment as an opportunity for contrarian investors, implying that the prevailing negativity allows for strategic buying. He outlines that a close above the six-month range high would signal the next phase of the primary uptrend, while a close below the 20-month moving average could delay, but not nullify, this bullish thesis.
Overall, the convergence of various technical indicators supports a bullish outlook for Dogecoin. While he admits that timing remains uncertain, he underscores a key principle: "The trend is your friend, and the trend is up." If this perspective holds true, Dogecoin could potentially reach the analyst’s target of $4.13, a level that may seem unattainable to current sellers but remains within reach.
As of the latest update, Dogecoin is trading at $0.171.
