Dogecoin gears for 18% rally, bull run to continue

Dogecoin is up over 50% in just three days, but memecoin’s rise will likely be prolonged. Analysis of on-chain and technical indicators, as well as derivatives market data, shows that DOGE could test the October 2021 top.

Dogecoin hits three-year high, poised for 18% increase

Dogecoin (DOGE) rose to a nearly three-year high of $0.42200 on November 12. The largest meme coin is likely poised for further gains as technical indicators suggest the uptrend may continue.

DOGE has made consecutive higher highs and higher lows since October 3.

The moving average convergence/divergence indicator is a momentum oscillator that is primarily used to determine whether a token has positive or negative momentum. This helps traders identify overbought or oversold conditions and identify upcoming trend reversals. The MACD is showing consecutive long green histogram bars above the neutral line, signaling an underlying positive momentum in Dogecoin price.

The awesome oscillator is often considered a “lagging” indicator, but it helps confirm trends and predict an upcoming momentum or movement in the token price. The AO on Dogecoin’s daily price chart shows that DOGE’s trend confirms an uptrend.

DOGE has successfully surpassed the October 2021 high at $0.340000 and overcome the resistance at the August 2021 high at $0.351700.

The June 2021 peak at $0.448340 is the next key resistance, 9% away from the current price. Once DOGE successfully flips this level, the May 2021 peak of $0.739950 is targeted, which is 80% above $0.410940.

DOGE/USDT daily price chart | Source: Tradingview.com

The relative strength index created a sell signal on the daily price chart; RSI is at 92. This means Dogecoin is “overbought” and a correction in the meme coin is likely. Traders need to closely monitor this indicator when opening a long position in DOGE.

The weekly price chart confirms the trend and shows DOGE breaking out of the range-bound price movement between the upper bound of $0.228880 and the lower bound of $0.08050. Three technical indicators, MACD, AO and RSI, reach similar conclusions as the daily price chart.

DOGE/USDT weekly price chart | Source: Tradingview.com Derivative investors expect an increase in DOGE

Open interest in Dogecoin increased dramatically, reaching $2.86 billion on Tuesday, November 12. This is the highest level in nearly three years. Coinglass data shows a 38% increase in open positions in the last 24 hours.

Dogecoin futures open interest | Source: Coinglass.com

Typically, an increase in open interest supports the price increase thesis for the token. Derivatives data analysis in the last 24 hours shows that investors expect the DOGE price to rise further as the long/short ratio is higher than 1 on exchanges such as Binance and OKX.

A ratio higher than 1 indicates that there are more investors betting on DOGE’s price increase. This means derivatives traders are bullish on DOGE’s price rise and the meme coin could extend its price rise in the short term.

Dogecoin derivatives data analysis | Source: Coinglass.com On-chain indicators show whales making moves on DOGE

Large wallet investors tagged as whales increased their Dogecoin transactions on November 6 and 10. These two events were marked as large spikes in the whale transaction count chart on Santiment.

An increase in whale transactions is generally indicative of large wallet transfers involving meme money. This could be deposition by whales or transfers to and from exchange wallets.

The Centiment chart shows that spikes in whale transactions coincide with local price peaks in Dogecoin.

Dogecoin price and whale transaction count comparison | Source: Santiment.com

The number of active addresses is an on-chain metric that helps determine a token’s relevance among crypto investors. The number of active addresses increased on November 6 and 10, as well as the increase in transaction volume. Similar increases correspond to local price peaks for Dogecoin, as seen in the Santiment chart below.

Active addresses and transaction volume | Source: Santiment.com Strategic considerations

On-chain and technical analysis of Dogecoin was conducted at a time when Bitcoin reached its all-time high of $89,940 on November 12, 2024. Data from Macroaxis.com shows that Dogecoin and Bitcoin are correlated, with a coefficient value of 0.94. This means that a correction in BTC could negatively impact DOGE.

Therefore, Dogecoin’s price increase is likely to be influenced by Bitcoin’s price trend, the state of the crypto market and the performance of the meme coin sector, and other market movers.

Disclosure: This article does not constitute investment advice. The content and materials on this page are for educational purposes only.