The Dogecoin price has been stuck in a state of correction and consolidation since the first week of December after a crazy multi-week rally that saw it peaking just below the $0.48 price level. Recent price action in the past 24 hours and seven days has been riddled by declines, with the RSI indicator reflecting a corresponding drop.
Crypto analyst Master Kenobi recently drew attention to this notable development in Dogecoin’s Relative Strength Index (RSI), highlighting its earlier break above 90% and comparing the current bull market with the patterns observed during DOGE’s 2021 rally.
DOGE RSI Mirrors That Of The 2021 Bull Market
Master Kenobi’s recent update on X outlines a striking similarity between Dogecoin’s RSI levels during the current cycle and those observed in the early stages of the 2021 bull market. In both instances, the RSI reached 90, which is far above the 70 threshold of overbought conditions. Particularly, the RSI indicator shows that the Dogecoin price reached overbought condition in November 2024 but continued to climb until early December.
Interestingly, the 2021 rally’s 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. Furthermore, Kenobi highlighted the RSI’s oscillation between two key lines at the 90 and 40 readings during the 2021 Dogecoin rally, which is a pattern that could repeat itself in the current bull market.
This time around, while the RSI has followed a similar trajectory of reversing after hitting 90 overbought condition, the price movement has been noticeably less severe. Over the 35 days since the RSI’s peak, the Dogecoin price has experienced a lesser 28% decline, which suggests it is now more stabilized than it was in the previous bull cycle.
What To Expect For Dogecoin Price?—Key Dates To Watch
As it stands, the Dogecoin RSI is currently around 43 and looks like it is going to decline further to 40. While the 2021 pattern doesn’t predict what will happen next, we can have an idea of what could play out next. If the pattern were to repeat itself, we could see the RSI rebounding towards the 90 reading at least two more times this cycle.
In an earlier analysis, Master Kenobi pointed out a narrowing timeframe between key RSI peaks across Dogecoin’s market cycles. From 260 days in the first cycle to 240 days in the second, and now 225 days in the ongoing cycle. Furthermore, the RSI consistently halts at similar levels, which showcases a degree of predictability in its behavior.
Kenobi also emphasized that DOGE appears to be slightly ahead of historical trends, and the RSI is 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-favorable landscape in the US and other countries.
Looking ahead, crypto analyst Master Kenobi highlights January 2, which stands out as a pivotal date to watch for Dogecoin. At the time of writing, the Dogecoin price is trading at $0.362 and is down by 5% and 13.3% in the past 24 hours and seven days, respectively.
Featured image created with Dall.E, chart from Tradingview.com
