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Dogecoin (DOGE) enthusiasts may be gearing up for what some analysts call a potentially explosive move in the meme coin’s price.
According to a recent analysis shared by “Bitcoindata21” on X, DOGE’s weekly Relative Strength Index (RSI) has cooled off after reaching overbought levels. The analyst noted that this signaled the conclusion of “wave 2” in its current market cycle.
Based on this observation, the analyst suggests that the most significant price movements, possibly leading to new all-time highs, could be on the horizon.
Dogecoin RSI Cooling Signals Potential Upside
The RSI, a widely used momentum indicator, is currently sitting at 61.84 on the weekly timeframe. This represents a dip from previous peaks near 94 during Dogecoin’s major rallies early last month.
Historically, DOGE has seen its most substantial price surges following similar RSI retracements, as highlighted in the chart shared by the analyst.
The chart notes key moments in Dogecoin’s history, including previous instances when RSI levels skyrocketed, coinciding with explosive price movements. Data confirms that the 2017 and 2021 rallies each followed a period of RSI cooling.
What’s Next for DOGE?
Notably, the observed cooling in the momentum indicator came on the back of Dogecoin’s price crash of 46% in December, from $0.4835 to just below $0.26. Now, with the significant cooling off from the speculative run, analysts expect Dogecoin’s uptrend to resume.
DOGE is already showing a significant improvement in its market position. In the last 24 hours, it has seen a 3% uptick, breaking into the $0.35 price range. Today’s rally marks a continuation from the comeback that gained momentum on January 1, when Dogecoin first broke back into the $0.33 price range.
Meanwhile, analysts expect the bulls to continue dominating for the next few 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 mainly targeting the $1 price as Dogecoin’s next stop. While “Bitcoindata21” expects Dogecoin to break an ATH next, he 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, arguing that this observation makes a 5X run or price targets between $1.5 and $2 “realistic” in their view.
Still, these projections remain conservative when considering some analysts expect Dogecoin to reach $37 within the next five months.