As a seasoned researcher with over two decades of experience in the financial markets and a keen interest in cryptocurrencies, I can’t help but see parallels between Dogecoin’s (DOGE) current price trend and its explosive rally in 2021. The tight consolidation phase we are currently witnessing bears a striking resemblance to the one that preceded the 8,000% surge, which is certainly intriguing.
Dogecoin’s (DOGE) current price trend appears similar to its pre-2021 8,000% surge, sparking talks of a potential significant increase in the upcoming weeks due to increased speculation.
DOGE’s consolidation trend mirrors 2021
After plunging by nearly 5 times (480%) from its lowest point in August 2024, DOGE experienced a surge of approximately 220% following Donald Trump’s election as U.S. President in November. However, the digital currency is currently experiencing a phase of stability or levelling off, known as consolidation.
Significantly, DOGE is currently moving inside a narrow trading band of $0.39 to $0.48, as indicated by the red circles on the chart above. This period of consolidation resembles the one from early 2021, when Dogecoin experienced a significant upward surge, then moved sideways before another substantial breakout.
“The weekly Relative Strength Index (RSI) of Dogecoin in both 2021 and its current trend appears to have similarities.” This version maintains the original meaning while using simpler, more conversational language.
By December 2024, the weekly Relative Strength Index (RSI) had surpassed 70, indicating it had entered the overbought territory – a technical signal suggesting either an upcoming price correction or prolonged stabilization. Yet, in 2021, such overbought conditions didn’t result in a substantial drop but rather continued the bullish trend instead.
Based on historical patterns suggested by Fibonacci retracement projections, it’s possible that the price of DOGE could potentially reach around $0.75 by January 2025, which represents an approximately 85% increase from its current value.
Whale accumulation rises amid Elon Musk’s influence
Onchain data further supports the bullish outlook.
According to Messari’s data, there are currently addresses holding a million Dogecoins or more who collectively hold 130.17 billion DOGE. This record-breaking figure represents the highest amount ever held by these whale addresses. The increasing number of such large-scale addresses suggests that big investors are becoming increasingly optimistic about Dogecoin’s potential for continued growth.
During the 2021 surge, there was a significant increase in the amount of DOGE held by large wallets (whales), with the total supply rising from approximately 110.31 billion to as much as 112.46 billion.
Elon Musk’s backing remains significant in shaping Dogecoin‘s progress and increasing interest from big investors, often referred to as whales. During the 2020-2021 market boom, Musk’s repeated tweets endorsing the digital currency served as a catalyst for its remarkable price increase.
A similar booster has arisen lately with the debut of the Department of Government Efficiency (DOGE), playfully linked to Dogecoin’s abbreviation, DOGE. This event has ignited fresh curiosity and speculation surrounding the largest internet-based currency humorously referred to as a “meme coin.
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2024-12-13 15:45