In just three days, Dogecoin has climbed more than 50%, but the coin’s rally is likely to continue. An analysis of on-chain and technical indicators and derivatives market data shows that DOGE could test its October 2021 peak.
Dogecoin hits three-year high, poised for 18% gains
Dogecoin (DOGE) reached a high of $0.42200 on November 12, its highest level in almost three years. The largest coin is likely poised for further gains as technical indicators suggest the uptrend may continue.
DOGE has consecutively formed higher highs and higher lows since October 3.
The Moving Average Convergence/Divergence Indicator is a momentum oscillator primarily used to identify whether a token has positive or negative underlying momentum. This helps traders determine overbought or oversold conditions and identify upcoming trend reversals. MACD displays consecutive high green histogram bars above the neutral line, signaling underlying positive momentum in Dogecoin price.
The incredible oscillator is generally considered a “lagging” indicator, but it helps confirm trends and predict an upcoming impulse or movement in the token’s price. The AO on Dogecoin’s daily price chart shows that DOGE’s trend confirms the uptrend.
DOGE managed to surpass the October 2021 high of $0.340000 and tackle resistance at the August 2021 high of $0.351700.
The June 2021 high of $0.448340 is the next key resistance, 9% from the current price. Once DOGE successfully reverses this level, the target will be the May 2021 high of $0.739950, which is 80% above $0.410940.
The Relative Strength Index generated a sell signal on the daily price chart, with an RSI at 92. This implies that Dogecoin is “overbought” and a correction is likely in the meme coin. Traders should closely monitor this indicator when opening a long position in DOGE.
The weekly price chart confirms the trend and shows that DOGE has slipped out of the price action range between the upper limit of $0.228880 and the lower limit of $0.08050. The three technical indicators, MACD, AO and RSI draw similar conclusions as the daily price chart.
Derivatives traders are bullish on DOGE
Open interest on Dogecoin saw a sharp rise, reaching $2.86 billion on Tuesday, November 12. This is the highest level in almost three years. Data from Coinglass shows a 38% increase in open interest in the last 24 hours.
Typically, an increase in open interest supports the thesis of a price gain for the token. Analysis of derivatives data from the last 24 hours shows that traders expect the price of DOGE to climb higher as the long/short ratio is above 1 on exchanges like Binance and OKX.
A ratio above 1 indicates that there are more traders betting on DOGE price increasing. This means that derivatives traders are optimistic about DOGE’s price rise and that the meme coin could extend its price rise in the near term.
On-Chain Indicators Show Whales Moving in DOGE
Large portfolio investors, called whales, increased their Dogecoin transactions on November 6 and 10. Both events are marked by significant spikes in the whale transaction count chart on Santiment.
An increase in whale transactions is usually indicative of large wallet transfers involving the meme coin. This can be either accumulation by whales or transfers to or from exchange wallets.
The Santiment chart shows that whale transaction spikes coincide with local Dogecoin price highs.
The number of active addresses is an on-chain metric that helps identify a token’s relevance among crypto traders. The number of active addresses peaked on November 6 and 10, alongside a spike in transaction volume. Similar spikes correspond to Dogecoin’s highest local prices, as seen in the Santiment chart below.
Strategic Considerations
On-chain and technical analysis of Dogecoin has been carried out at a time when Bitcoin reached a new all-time high at $89,940 on November 12, 2024. Data from Macroaxis.com shows that Dogecoin and Bitcoin are correlated, the coefficient is 0.94, which means that a correction of BTC could have a negative impact. DOGE.
The price rise of Dogecoin is therefore likely to be influenced by the price trend of Bitcoin, the state of the crypto market, and the performance of the coin sector, among other market factors.
Disclosure: This article does not represent investment advice. The content and materials presented on this page are intended for educational purposes only.