Is Dogecoin only starting its big rally after 70% weekly gains?

Dogecoin's (DOGE) price has experienced a significant surge of approximately 70% this week, fueled by a bullish trend across the cryptocurrency market. This momentum hints at further potential for gains in March, owing to a mix of technical and fundamental indicators.

Dogecoin whales accumulate

Dogecoin's recent price surge comes amid an increase in DOGE holdings among its richest investors, also known as "whales." For instance, the number of addresses holding more than 100,000 DOGE tokens has risen 0.7% since the year's beginning.

At the same time, the number of entities with a balance of over 1 million DOGE has witnessed a slight dip after Feb. 12.

Given the substantial holdings, these addresses likely represent exchanges, suggesting traders have been beginning to prefer to retain DOGE rather than engage in active trading. This behavior signals strong accumulation.

Memecoin mania ahead of Bitcoin halving

Dogecoin's price boom appears ahead of the fourth Bitcoin halving scheduled for April 19, 2024. Interestingly, this price rally is akin to similar upside moves before previous Bitcoin halving events in May 2020 and July 2016.

Notably, DOGE price surged 200% ahead of the first Bitcoin halving, and by approximately 50% ahead of the second, as shown below.

Generally, traders tend to seek alternative investments like memecoins for higher short-term gains, anticipating that the halving will boost the overall market. This behavior is driven by speculation and the desire to capitalize on the increased market activity associated with Bitcoin's supply shock.

Related: Solana rockets 13% to new yearly high, led by WIF memecoin frenzy

Like Dogecoin, other top memecoins, including Shiba Inu (SHIB), Pepe (PEPE), and Bonk (BONK), have seen substantial gains in the days leading up to the Bitcoin halving.

DOGE price technicals hint at more upside

DOGE's next upside target appears to be at its 0.236 Fibonacci retracement line, as shown below.

This price point was a foundational support during the downtrend from May 2021 to November 2021, indicating its critical role in the market's bearish phase. Once it flipped to a resistance level in December 2021, this threshold became a formidable barrier. It has been maintaining its significance as a key resistance point to this date.

Heading into March 2024, Dogecoin is on track for a potential 25% increase to reach $0.18, buoyed by a robust buying mood within the memecoin arena, spurred on by Bitcoin's recent surge. This optimistic trend suggests Dogecoin might hit its target by month's end.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.