Dogecoin Price Pattern Hints towards a possible 85% Rally

Dogecoin (DOGE) is exhibiting a price pattern similar to the one observed before its significant 8,000% surge in 2021, suggesting the potential for a major breakout in the near future.

Since its August 2024 low, Dogecoin has gained 480%, with a 220% increase following Donald Trump's election victory in November. However, it is currently consolidating between $0.39 and $0.48 after its recent parabolic rally.

This price action mirrors what occurred in early 2021, when Dogecoin experienced a substantial increase followed by a lateral trend before signaling another significant breakout.

The weekly Relative Strength Index (RSI) is a key indicator supporting this potential rally. As of December 2024, the RSI has reached overbought territory, surpassing the 70 level.

Typically, this is interpreted as a sign of an impending correction or sustained consolidation. However, in 2021, similar conditions did not result in a decline but rather marked the start of bullish momentum.

If history were to repeat itself, DOGE could potentially surge to $0.75 in January 2025, representing an impressive 85% price increase.

The presence of whales is also contributing to the bullish outlook. According to Messari's on-chain data, wallet addresses holding 1 million DOGE or more now control 130.2 billion DOGE, a record high.

A similar accumulation by whales was observed during the 2021 rally, when DOGE held by these addresses jumped from 110.3 billion to 112.5 billion.

This accumulation from large investors, coupled with Elon Musk's ongoing influence over Dogecoin through his recent creation of the Department of Government Efficiency (DOGE), has reignited interest in the cryptocurrency.

Musk's support, particularly his earlier tweets endorsing Dogecoin, has been influential in boosting demand and driving up its price.