Is DOGE Preparing for a Massive Rally?

TL;DR

Dogecoin (DOGE) surged 15% this week, breaking a six-month downtrend, with analysts predicting a potential rally to $0.21 amid strong whale activity. However, DOGE’s high RSI above 80 suggests that it may be overbought, indicating a possible price correction soon.

‘it has begun’

Dogecoin (DOGE), like many other meme coins, has been on an upward trend lately, with its price increasing by 15% on a weekly basis. It is currently trading around $0.12 (according to data from CoinGecko) and several analysts believe that this could be the turning point of a major bull run.

Price DOGE, Source: CoinGecko

User X, Captain Faibik, claimed that the price of DOGE has broken a six-month falling wedge pattern to the upside. The trader believes that this development could be a precursor to a price jump to $0.21 in the coming months. Mikybull Crypto shared a similar thesis, although he did not outline an exact goal for the near future.

$DOGE just broke out of 6 month downtrend.

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

— Mikybull Crypto (@MikybullCrypto) September 26, 2024

Another popular individual who participated is veteran trader Peter Brandt. He pointed to a “channel break”, expecting the long-term chart to “also be constructive”.

DOGE’s latest resurgence coincides with increased whale activity. According to X user Ali Martinez, these big investors have bought over 1.4 billion coins (worth over $170 million at current prices) in a 48-hour period.

Whales buying large amounts of DOGE can positively affect the price of the meme coin as it leaves a reduced amount of tokens in circulation. Fundamental principles of economics dictate that valuation should head north, assuming demand remains flat or increases. Moreover, such actions could be seen as a sign of confidence by smaller players and attract more people (and therefore capital) to the ecosystem.

This metric indicates a bearish scenario

Contrary to the bulls mentioned above, the Relative Strength Index (RSI) suggests that DOGE could experience a pullback soon. The technical analysis tool measures the magnitude of recent price changes to determine overbought or oversold conditions.

It ranges between 0 and 100, as a ratio above 70 indicates that the meme coin could be overvalued and headed for an imminent correction. Anything below 30 indicates a potential buying opportunity. The RSI ratio is currently above 80.

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