Is DOGE Gearing up 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 it may be overbought, signaling a possible price correction soon.

‘It Has Begun’

Dogecoin (DOGE), just like many other meme coins, has been on an uptrend lately, with its price spiking by 15% on a weekly scale. It currently trades at around $0.12 (per CoinGecko’s data), and multiple analysts believe this could be the tipping point of a major bull run.

The X user Captain Faibik claimed that DOGE’s price has broken a six-month falling wedge pattern to the upside. The trader thinks this development could be a precursor of a price jump to as high as $0.21 in the following months. Mikybull Crypto shared a similar thesis albeit not outlining an exact target for the near future.

$DOGE just broke out of the 6-month downtrend.

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

— Mikybull Crypto (@MikybullCrypto) September 26, 2024

Another popular individual who chipped in is the veteran trader Peter Brandt. He noted a “channel breakout,” expecting the long-term chart to “be constructive as well.”

DOGE’s latest resurgence coincides with an increased whale activity. According to X user Ali Martinez, such large investors have purchased over 1.4 billion coins (worth more than $170 million at current rates) in the span of 48 hours.

Whales buying large amounts of DOGE can positively impact the price of the meme coin since it leaves a reduced amount of tokens in circulation. Fundamental principles of economy dictate that the valuation should head north, assuming demand keeps its levels or rises. Additionally, these actions could be seen as a sign of confidence by smaller players and attract more people (hence capital) into the ecosystem.

This Metric Signals a Bearish Scenario

Contrary to the aforementioned bulls, 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 from 0 to 100 as a ratio exceeding 70 indicates that the meme coin could be overvalued and headed for an imminent correction. Anything below 30 hints at a potential buying opportunity. Currently, the RSI ratio stands at over 80.