Dogecoin has been on a shaky path lately, entering March with a steep decline and only briefly reclaiming momentum before stumbling again. After starting the month in a downtrend, the meme coin managed to climb back to the $0.20 mark during the middle of the just-concluded week.
However, that recovery was short-lived. Dogecoin has since dropped to around $0.17 in the past 24 hours, and there’s the possibility that it could dip even further if selling pressure persists. Yet, despite the current pullback, a technical signal that has previously preceded major rallies this cycle is taking shape on the weekly candlestick chart.
Weekly RSI Alignment With Candlestick Pattern Mirrors Past Bullish Breakouts
Dogecoin’s Relative Strength Index (RSI) indicator has been on a crazy downtrend for months across multiple timeframes. Taking to social media platform X, crypto analyst Trader Tardigrade highlighted an interesting phenomenon with the RSI indicator on Dogecoin’s weekly candlestick chart. The analysis was made on Dogecoin’s weekly candlestick timeframe and looks at the meme coin’s price action since September 2023.
Particularly, the analyst noted that the weekly RSI “suggests a strong potential rebound from the current level,” before confidently adding, “$Doge: $1 on the way.”
DOGE market cap currently at $25 billion. Chart: TradingView.com
What makes this more than just another prediction is the technical confluence forming on the weekly candlestick chart. Over the past two weeks, Dogecoin has printed both a Dogi and an inverted hammer on the weekly timeframe; patterns that, combined with a declining RSI, have marked the beginning of powerful rallies this cycle.
This same combination has only occurred twice before since September 2023. The first was in October 2023, when Dogecoin surged from $0.07 to $0.22 by March 2024. The second instance came in September 2024, preceding a move from $0.10 to $0.48 by December. Now trading at $0.17, the current setup has again lined up in familiar fashion, and a similar rally might finally take Dogecoin beyond the coveted $1 price level.
Image From X: Trader Tardigrade
Short-Term Divergence Strengthens Hopes Of Recovery
In a follow-up post, Trader Tardigrade also pointed to bullish divergence forming on Dogecoin’s hourly chart. “Dogecoin is finding its bottom whilst RSI signals Bullish Divergence on hourly chart,” he wrote, adding that the coin may soon experience a short-term relief from the downtrend.
This divergence indicates that momentum is gradually turning despite continued price weakness. The divergence on the hourly candlestick chart is a short-term signal. Although short-term signals alone are not enough to guarantee a long-term rally, they can serve as the first confirmation that a bottom is forming.
Image From X: Trader Tardigrade
For Dogecoin’s price, this could mean a bounce from the $0.17 level if it manages to hold and a reset of the price movement heading into April. However, a failure to maintain this level due to a lack of bullish momentum on the broader market may invalidate the short-term optimism and place Dogecoin below $0.17 at the beginning of April.
Featured image from Gemini Imagen, chart from TradingView
Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.
Credit: Source link