Is Dogecoin Set for a Major Price Rally Soon?

TL;DR

• Dogecoin (DOGE) experienced a 15% increase this week, breaking a six-month downtrend, with analysts forecasting a potential climb to $0.21 driven by strong whale activity.
• However, DOGE’s elevated RSI above 80 indicates it might be overbought, which could lead to a price correction in the near future.

‘The Movement Has Started’

Dogecoin (DOGE), like many other meme currencies, has been trending upwards recently, showing a 15% price increase over the past week. It is currently trading close to $0.12 (as per CoinGecko’s data), and several analysts speculate that this could mark the onset of a significant bull market.

X user Captain Faibik asserted that DOGE’s price has broken a falling wedge pattern that lasted six months, heading upward. The trader believes this could foreshadow a price increase to as high as $0.21 in the coming months. Mikybull Crypto echoed a similar outlook but did not specify an exact target for the short term.

$DOGE has just broken out of a 6-month downtrend.

The movement has started https://t.co/51Bqh6J8tf pic.twitter.com/F1OjrePMq6

— Mikybull Crypto (@MikybullCrypto) September 26, 2024

Another notable voice is veteran trader Peter Brandt, who pointed out a “channel breakout,” anticipating that the long-term chart will “be encouraging as well.”

The recent rise of DOGE has coincided with a surge in whale activity. According to X user Ali Martinez, these large investors have acquired over 1.4 billion coins (valued at more than $170 million at current prices) within 48 hours.

When whales purchase substantial amounts of DOGE, it generally lifts the price of the meme coin as it diminishes the number of tokens available in circulation. Economic principles dictate that the valuation should trend upward, assuming demand remains steady or increases. Additionally, such moves may be interpreted as a display of confidence by smaller investors, potentially drawing more participants (and capital) into the market.

This Indicator Foreshadows a Bearish Trend

In contrast to the previously discussed bullish outlook, the Relative Strength Index (RSI) suggests that DOGE may face a retreat shortly. This technical indicator evaluates the intensity of recent price movements to assess overbought or oversold conditions.

The RSI ranges from 0 to 100, with values above 70 indicating that the meme coin might be overvalued and likely heading for a correction. Values under 30 signal a potential buying opportunity. Currently, the RSI value exceeds 80.