Dogecoin (DOGE) is currently displaying a price pattern similar to what was witnessed before its massive 8,000% increase in 2021, and this signals for a major breakout to take place sometime soon.
Dogecoin is up 480% from its August 2024 low, including a 220% gain following Donald Trump’s election win in November.
However, the cryptocurrency is presently consolidating between $0.39 and $0.48 after its recent parabolic rebound. This type of price action closely resembles what happened back in early 2021 when Dogecoin saw a big rise followed by a lateral trend before signaling another big breakout.
One of the major indicators that could support this potential rally is the weekly Relative Strength Index (RSI). As December 2024 reached, the RSI has risen toward overbought territory, breaking above the level of 70.
This is often interpreted as a sign of either an imminent correction or a phase of sustained consolidation. However, in 2021, similar conditions did not trigger a drop; instead, they marked the beginning of a bullish momentum.
DOGE – USD Weekly Price Chart
DOGE/USD Weekly Price Chart | Source: TradingView
If history were to repeat itself, then $DOGE is anticipated to touch $0.75 this January 2025, in an astonishing 85% price rise.
Also, the buildup of whales provides pace to this bullish forecast. According to on-chain data from Messari, the wallet addresses holding 1 million DOGE or more now control a whopping 130.2 billion DOGE, a number never recorded before.
DOGE supply in addresses
DOGE supply in addresses. Source: Messari
Moreover, a similar buildup of whale accumulation was seen during the 2021 rally when $DOGE held by these addresses rocketed from 110.3 billion to 112.5 billion.
Such a build up from big investors along with an ongoing Elon Musk’s influence over Dogecoin through his most recent creation of the Department of Government Efficiency (DOGE), has reignited interest in DOGE.
Also, his backing, particularly his earlier tweets from 2020 to 2021 endorsing Dogecoin, has been instrumental in spurring demand and elevating its price.