Dogecoin Shows Signs of Trend Reversal as Analyst Points to Bollinger Band Shift

The core of Cantonese Cat’s analysis hinges on a clear change in Dogecoin’s trading character on the daily chart, as viewed on Binance. For months, DOGE was “riding on the lower half of the Bollinger band,” a pattern typical of sustained bearish pressure. The recent move, however, has seen the cryptocurrency close above the critical 20-day basis line—or middle band—near $0.1348, pushing it into the upper half of the volatility envelope. The analyst frames this basis line as the new “line in the sand” for the trend’s validity.

This positioning matters because price behavior in the upper half of the Bollinger Bands often differs fundamentally from behavior in the lower half. Holding above the basis line suggests strengthening momentum and a potential shift from a distribution phase to one of accumulation. The immediate technical levels are clear: support is now at the basis line near $0.1348, while resistance sits at the upper band near $0.1564. A sustained break above this upper band would be a powerful confirmation of the new bullish structure, while a fall back below the basis line would signal the reversal attempt may be failing.

Zooming out to the weekly chart, Cantonese Cat employs Elliott Wave theory to contextualize the broader price action. The analyst posits that the 13-month bear market for DOGE likely constituted a completed “Wave 2” correction, following a prior “Wave 1” advance. This sets the stage for a potential “Wave 3” explosion, which in Elliott Wave terms is typically the strongest and most extended wave of a trend.

The analysis provides explicit Fibonacci retracement levels to chart the possible path. DOGE is currently trading between the 0.382 retracement near $0.1177 and the 0.5 level at $0.1542. A decisive break above the latter opens the door to higher targets at $0.2021 (0.618), $0.2477 (0.707), and beyond. The long-term extensions outlined are notably ambitious, with the 1.0 level marked near $0.4844 and extensions reaching approximately $1.9934 (1.618) and even the “$9 region”—specifically $8.9077 (2.272)—which the analyst has repeatedly cited as a cycle target.

Adding a cross-asset dimension to the thesis, Cantonese Cat draws a historical correlation between Dogecoin and the iShares Russell 2000 ETF (IWM), which tracks small-cap U.S. stocks. The analyst notes that “DOGE has always been about 2-4 months behind IWM during the bull phase.” This pattern suggests Dogecoin’s major upside moves have historically echoed breakouts in the Russell 2000, a benchmark often seen as a gauge for risk appetite.

This comparison implies that DOGE’s current technical improvement could be read as a delayed reaction to broader market strength, particularly in risk-sensitive assets. If this historical template holds, sustained strength in small-cap stocks could provide a macro tailwind for Dogecoin’s purported trend reversal. At the time of the analysis, DOGE was trading at $0.13674, holding just above the crucial daily basis line and testing the resolve of the new bullish posture.