Dogecoin has traversed a tumultuous course recently, commencing March with a significant downturn and only briefly regaining traction before faltering once more. After starting the month in a negative trend, the meme coin successfully ascended back to the $0.20 mark in the middle of the recently concluded week.
Nonetheless, that resurgence was fleeting. Dogecoin has subsequently fallen to approximately $0.17 over the past day, and there’s a likelihood that it could decrease even more if selling pressures continue. Yet, in spite of the present decline, a technical indicator that has previously foreshadowed significant surges this cycle is materializing on the weekly candlestick chart.
Weekly RSI Correlation With Candlestick Pattern Resembles Previous Bullish Breakouts
Dogecoin’s Relative Strength Index (RSI) metric has been in a severe downtrend for several months across different timeframes. On the social media platform X, crypto analyst Trader Tardigrade pointed out an intriguing occurrence with the RSI metric on Dogecoin’s weekly candlestick chart. The analysis was conducted on Dogecoin’s weekly candlestick timeframe and assesses the meme coin’s price movements since September 2023.
In particular, the analyst remarked that the weekly RSI “indicates a strong possibility of a rebound from the current position,” before confidently asserting, “$Doge: $1 on the horizon.”
DOGE market capitalization currently at $25 billion. Chart: TradingView.com
What elevates this beyond merely another forecast is the technical confluence developing on the weekly candlestick chart. Over the last fortnight, Dogecoin has formed both a Dogi and an inverted hammer on the weekly timeframe; patterns that, when paired with a declining RSI, have signaled the onset of robust rallies this cycle.
This identical combination has only manifested twice previously since September 2023. The first instance was in October 2023, when Dogecoin skyrocketed from $0.07 to $0.22 by March 2024. The second occurrence transpired in September 2024, preceding a climb from $0.10 to $0.48 by December. Currently trading at $0.17, the existing arrangement has once more aligned in a familiar manner, and a comparable rally could potentially carry Dogecoin beyond the sought-after $1 price point.
Image From X: Trader Tardigrade
Short-Term Divergence Reinforces Hopes For Recovery
In a subsequent post, Trader Tardigrade also pointed out bullish divergence emerging on Dogecoin’s hourly chart. “Dogecoin is discovering its bottom while RSI indicates Bullish Divergence on the hourly chart,” he stated, emphasizing that the coin might soon witness a temporary respite from the downtrend.
This divergence signifies that momentum is slowly reversing despite ongoing price weakness. The divergence present on the hourly candlestick chart serves as a short-term indicator. While short-term indicators alone may not suffice to ensure a long-term rally, they can act as preliminary confirmation that a bottom is forming.
Image From X: Trader Tardigrade
For Dogecoin’s valuation, this could signify a rebound from the $0.17 threshold if it succeeds in holding and a resetting of the price trajectory as April approaches. However, an inability to maintain this threshold due to insufficient bullish momentum in the broader market could undermine the short-term optimism and push Dogecoin below $0.17 as April begins.
Featured image from Gemini Imagen, chart from TradingView
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