Dogecoin Price’s Big Move Ahead, Here’s All You Need To Know

Dogecoin's price has struggled to break out of its March and April trading range. However, could the leading meme coin build bullish momentum and recover, particularly after a recent failed rally attempt?

Like many top cryptocurrencies, Dogecoin experienced some relief from bearish pressure in the second week of April. However, weak demand limited its recovery, resulting in mostly sideways price action.

Despite this sideways movement, some analysts remain optimistic about Dogecoin's bullish potential. One analysis highlights parallel channels in the Dogecoin price chart, suggesting a significant bounce may be imminent. Historical price action, dating back to 2016, shows that similar parallel channels, lasting several weeks, preceded substantial price movements.

DOGE has experienced three major parallel channels since 2023. The most recent, a pullback from December highs, was the steepest. This analysis suggests these channels could precede a significant upward move.

Will RSI Divergence Still Signal a Bullish Move for Dogecoin?

DOGE reached a lower low in the first week of April compared to its March low. Simultaneously, RSI lows formed a divergence, typically indicating an upcoming bullish move.

A price-RSI divergence often signals a potential price reversal. However, Dogecoin's relatively sideways price action last week limited upside potential, raising questions about a potential rally. A bullish outcome would align with both the price-RSI divergence and the parallel channel analysis.

Several indicators suggest DOGE might regain bullish momentum. For example, the Money Flow Index (MFI) showed upward movement over the weekend, indicating increased liquidity flow into DOGE. Additionally, spot outflows last week decreased to levels last seen in late October 2024.

Increased Dogecoin Derivatives Activity

Dogecoin experienced low volatility last week but may see increased volatility this week due to a surge in derivatives activity. Derivatives volume increased by 16.57%, while options volume saw a massive 230.64% increase in the last 24 hours. Open interest in Dogecoin options surged by 127.71% during the same period.

Such a significant increase in derivatives activity often precedes substantial price movements in the underlying asset. This activity was accompanied by positive funding rates, suggesting derivatives traders anticipate a bullish move. However, this can also lead to leveraged liquidations. Coinglass data showed $2.84 million in Dogecoin liquidations in the last 24 hours, with $2.17 million in long liquidations due to a recent minor price dip.

Dogecoin's recent performance highlights weak demand and its inability to recover strongly under current uncertain market conditions. Whether the leading meme coin will experience a strong rebound remains uncertain. DOGE performed well during the Q4 2024 rally but has since relinquished those gains. The memecoin, along with the broader crypto market, is hampered by unfavorable economic conditions for risk-on assets. The possibility of rate cuts further diminishes the prospects of a strong short-term recovery.