Cryptocurrency Market Review, November 1

The famous memecoin is aiming even higher as the Dogecoin rally continues. Since it is difficult to analyze volatile memecurrency using traditional tools, looking at DOGE from the perspective of tried and tested theory will give us some useful hints.

Eliot’s Wave Theory on DOGE

According to a theory developed by Ralph Nelson Elliott, the market moves in definite, recurring fractal wave patterns. By understanding and identifying these patterns, investors are able to predict how long an asset will move upwards and when the rally will end.

This method of analysis can sometimes be useful when other indicators that normally work in a rising market are no longer reliable or show any information that would help investors determine their next move.

DOGE ChartSource: TradingView

Since Dogecoin’s rally was as explosive as one would expect from a volatile memecoin, most lagging indicators were unable to catch up with the price surge, leaving investors only with analytical methods such as volume indicators and Elliot waves.

According to the last one, Dogecoin is currently transitioning from the second to the third wave, which should be the biggest price surge for the Doge-themed crypto in this growth cycle. However, there is a problem.

A wavy pattern is considered valid only when the second wave in the market is a correction. In the case of DOGE, there is no chance for the asset to experience at least one short-term correction that would cool the asset and allow it to go further without being severely overbought.

Since the third wave is generally considered to be the strongest in the market, DOGE will require a significant inflow of investors to grow further in the market. With new investments already overheating, the likelihood of failure increases exponentially, and even in the growth phase, we could face unexpected reversals.

The cryptocurrency market is losing strength

The market recovery everyone is urging may be coming to an end as volatility in most Crypto assets has been slowly declining, the first sign of an impending reversal.

As volatility gradually disappeared from the market, investors became more conservative, tending to avoid providing additional capital inflows. Based on the volume profile, we are already seeing this trend slowly covering the market.

Ethereum has lost more than 50% of its Oct. 25 trading volume despite the whales’ funding, leading to a lack of momentum in the market. ETH has lost around 5% of its value over the past two days, and its current price performance suggests it doesn’t have the support it needs to continue rising.

At press time, most assets have seen modest price gains of 5-10% over the past 24 hours, with a marked downtrend in volume likely leading to a pullback in the coming days.

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