Dogecoin (DOGE) is exhibiting a price pattern that resembles its behavior before the 8,000% rally in 2021, fueling speculation about another major breakout in the coming weeks.
DOGE’s consolidation trend mirrors 2021
DOGE’s price has rebounded 480% from its August 2024 lows, including a 220% rally following Donald Trump’s presidential election victory in November. However, the cryptocurrency has now entered a period of consolidation.
DOGE/USD weekly price chart. Source: TradingView
Notably, DOGE is trading within a tight range of $0.39-$0.48, marked by red circles on the chart above, following its recent parabolic rebound. The consolidation phase mirrors the one from early 2021 when Dogecoin experienced a strong upward move followed by a sideways trend before another major breakout.
Related: Dogecoin flips Porsche market cap as DOGE ETP, Musk drive rally
What’s further similar between the 2021 and current Dogecoin price trends is the weekly relative strength index (RSI).
As of December 2024, the weekly RSI had entered overbought territory above 70, a technical signal for either a price correction or prolonged consolidation. However, in 2021, similar overbought conditions did not lead to a significant downturn but a bullish continuation.
If history repeats, DOGE could initially target $0.75 by January 2025, as indicated by Fibonacci retracement projections, reflecting an 85% surge in price.
Source: X
Whale accumulation rises amid Elon Musk’s influence
Onchain data further supports the bullish outlook.
Messari shows that addresses holding 1 million DOGE or more now hold 130.17 billion DOGE, marking an all-time high. The rising supply of whale addresses indicates growing confidence among large investors in Dogecoin’s upward trajectory.
DOGE supply in addresses with over 1 million tokens. Source: Messari
A similar boom in the DOGE supply held by whale addresses was noted during the 2021 rally, with the count climbing from 110.31 billion to as high as 112.46 billion.
DOGE supply with balance of over 1 million tokens. Source: Messari
Elon Musk’s influence continues to play a key role in driving Dogecoin’s performance and growing demand among whales. During the 2020-2021 rally, Musk’s frequent tweets in support of the memecoin were instrumental in fueling its dramatic price surge.
A comparable catalyst has emerged recently with the launch of the Department of Government Efficiency (DOGE), humorously tied to Dogecoin’s ticker, DOGE. This development has sparked renewed speculative interest in the world’s biggest memecoin.
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.
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