Dogecoin (DOGE) enthusiasts may be bracing for what some analysts are calling a potentially explosive price move for the meme coin.
According to According to a recent analysis shared by “Bitcoindata21” on X, DOGE’s weekly Relative Strength Index (RSI) has cooled after reaching overbought levels. The analyst noted that this marked the conclusion of “wave 2” of the current market cycle.
Based on this observation, the analyst suggests that the largest price movements, which could lead to new all-time highs, could be on the horizon.
Cooling Dogecoin RSI Signals Upside Potential
The RSI, a widely used momentum indicator, currently stands at 61.84 on the weekly time frame. This represents a decline from previous peaks near 94 during Dogecoin’s major rallies early last month.
Historically, DOGE has seen its largest price increases following similar RSI retracements, as highlighted in the chart shared by the analyst.
The chart notes the key moments of The History of Dogecoinincluding previous instances where RSI levels soared, coinciding with explosive price movements. The data confirms that the 2017 and 2021 rallies each followed a period of RSI cooling.
What’s next for DOGE?
Notably, the observed cooling of the momentum indicator came following Dogecoin’s price drop of 46% in December, from $0.4835 to just under $0.26. Now, with speculation slowing significantly, analysts expect Dogecoin’s uptrend to resume.
DOGE is already showing significant improvement in its market position. Over the past 24 hours, it saw an increase of 3%, falling within the $0.35 price range. Today’s rally marks a continuation of the comeback that accelerated on January 1, when Dogecoin first returned to the $0.33 price range.
Meanwhile, analysts to wait for bulls will continue to dominate over the coming weeks and push Dogecoin to an all-time high. Notably, at its current price, Dogecoin is 52% below its ATH of $0.7376.
Market commentators are primarily targeting the $1 price as Dogecoin’s next stop. While “Bitcoindata21” expects Dogecoin to cross an ATH next, it did not specify a target.
Commenting on his analysis, one market observer noted that checking the RSI band on the monthly chart is even more promising: argue that this observation makes a 5X run or price targets between $1.5 and $2 “realistic” in their opinion.
Nevertheless, these projections remain conservative considering that some analysts expect Dogecoin reach $37 in the next five months.
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