Dogecoin (DOGE) Could Be on the Verge of a Massive Price Upswing

Benzinga - Benzinga provides a critical analysis of a popular cryptocurrency market chart shared by a renowned trader, highlighting a potential price action opportunity in Dogecoin (CRYPTO: DOGE).

What Happened: Renowned crypto trader Ali Martinez has shared an update suggesting that Dogecoin might be setting the stage for a large price upswing. In his latest analysis shared via X, formerly Twitter, Martinez focuses on the stock RSI indicator on the weekly timeframe.

As the chart shows, the stock RSI is approaching a bullish crossover, a technical signal that has historically been associated with major rallies in the Dogecoin price.

“Dogecoin is about to go parabolic. Whenever the stock RSI had a bullish crossover on the weekly chart, Dogecoin usually experienced a significant price rebound.,” Martinez says.

According to his observations, whenever this oscillator crosses bullish on the weekly chart, which occurs when the RSI line crosses above the 50 level, DOGE typically experiences notable price spikes.

“For instance, in October 2023, when the stock RSI had a bullish crossover, Dogecoin surged by 88%.

“In February 2024, the same thing happened. After the stock RSI had a bullish crossover, Dogecoin surged by 187%. Even in July 2024, Dogecoin rose by 56% after the stock RSI had a bullish crossover. And in September 24, the price increase was even more significant. Dogecoin skyrocketed by 444% after the stock RSI had a bullish crossover on the weekly chart,” Martinez adds.

Also, Martinez notes that the current weekly candlestick is forming a doji, a candle with a very small real body that often signals a potential trend reversal, especially when followed by a confirming second candle.

"DOGE is printing a potential bullish reversal doji on the weekly chart!" Martinez says.

While it’s still too early to call a doji star pattern because the weekly candle won’t officially close until Sunday and the second candle required for confirmation has yet to form, it’s a promising signal for DOGE bulls. If the ongoing candle manages to maintain its slim real body by week's end and if next week's candle confirms this formation, then Dogecoin could be setting the stage for a textbook bullish reversal scenario.

From a pure price-action perspective, Dogecoin began this week at around $0.16798, touched a high of $0.18082, dipped as low as $0.14297, and has since rebounded towards $0.16766. This closeknit price range explains why the current candlestick appears like a doji, highlighting the stalemate between buyers and sellers.

However, there are still four days left until the weekly candle closes; this could lead to greater or lesser volatility and ultimately to a doji or no doji at all, and also to no confirmation. As doji candles frequently emerge during market transition phases, any upward or downward momentum can quickly alter the candle's shape.

While Martinez's analysis highlights the potential for a parabolic move, it's crucial to note that confirmation is key. The second weekly candle for the Doji Star has yet to form, and the current doji-like candle might disappear if the market experiences a substantial shift before Sunday.

Those watching over the weekend will need to keep an eye on whether DOGE manages to hold its ground around the present price levels, thereby preserving a minimal difference between the open and close of the weekly candlestick. If that occurs and if next week's candle underscores renewed buying pressure, then the minimum requirement for the Doji Star pattern would be met, potentially foreshadowing a burst to the upside.

For now, the market is in wait-and-see mode. With the stock RSI apparently prepared for a bullish crossover, the coming days may prove pivotal in determining whether Dogecoin is truly on the cusp of another parabolic upswing.

Dogecoin is trading at $0.16996 at the time of writing.

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