The Dogecoin price has been experiencing a period of correction and consolidation since the beginning of December, following a significant rally that saw it peak just below $0.48. Recent price movements in the past 24 hours and seven days have been marked by declines, with the RSI indicator reflecting this downward trend.
Crypto analyst Master Kenobi recently pointed out a notable development in Dogecoin’s Relative Strength Index (RSI), noting its break above 90% and drawing comparisons to the patterns seen during Dogecoin’s rally in 2021.
Master Kenobi highlighted the similarity between Dogecoin’s RSI levels in the current cycle and those observed during the early stages of the 2021 bull market. In both instances, the RSI reached 90, well above the overbought threshold of 70. The RSI indicator showed that Dogecoin’s price reached overbought conditions in November 2024 but continued to rise until early December.
During the 2021 rally, the peak was followed by a significant cooldown, with the RSI dropping to 43% and the Dogecoin price plummeting by 55% over a 25-day period. Kenobi also noted the oscillation of the RSI between key lines at the 90 and 40 readings during the 2021 rally, suggesting a potential repeat in the current market cycle.
While the RSI has followed a similar trajectory of reversing after hitting the 90 overbought condition this time around, the price movement has been less severe. Over the 35 days since the RSI’s peak, the Dogecoin price has experienced a 28% decline, indicating a more stabilized market compared to the previous bull cycle.
Looking ahead, the Dogecoin RSI is currently around 43 and appears poised to decline further to 40. If historical patterns were to repeat themselves, the RSI could rebound towards the 90 reading at least two more times in this cycle. Master Kenobi also highlighted a narrowing timeframe between key RSI peaks across Dogecoin’s market cycles, indicating a degree of predictability in its behavior.
DOGE seems to be slightly ahead of historical trends, with the RSI holding above its moving average. This suggests that the current bull cycle may still have room for growth, especially as the industry moves into a more crypto-friendly landscape in the US and other countries.
Crypto analyst Master Kenobi has pointed out January 2 as a pivotal date to watch for Dogecoin. At the time of writing, the Dogecoin price is trading at $0.362, down by 5% and 13.3% in the past 24 hours and seven days, respectively.
In conclusion, Dogecoin’s price movements have been influenced by a combination of technical indicators and historical patterns, with the market showing signs of stabilization compared to previous cycles. Investors should keep a close eye on key dates and indicators to anticipate potential price movements in the coming weeks.
