Dogecoin (DOGE) Price Prediction: RSI Reset Hints at Potential Breakout Targeting $0.50

According to data from Santiment, DOGE's “mean dollar invested age” has dropped by 31% over the past eight weeks, signaling increased circulation of dormant coins.

Dogecoin (DOGE) price pulled back last week after rising to a multi-month high. However, key on-chain metrics and technical analysis suggest that the meme coin could be poised for another leg up.

Here’s a closer look at the recent price action and what traders are expecting next.

Dogecoin price dropped by 7.85% last week, closing at $0.41 on Monday. This marks a significant slowdown from the previous week’s 47.26% gain. However, DOGE price is still up by 7.85% year-to-date.

Despite the pullback, Dogecoin price remains above a key technical level. The 50-day EMA currently sits at $0.38, and DOGE price has not closed below this level since early November. This indicates that the short-term trend is still bullish.

On a broader time frame, Dogecoin price appears to be forming a bullish pennant pattern. This technical formation is typically seen during a period of consolidation following a strong uptrend. If the pattern completes, it could lead to a breakout and continuation of the uptrend.

Relative Strength Index (RSI) dropped back into neutral territory last week after reaching overbought levels in the previous week. This pullback in RSI is bullish as it could indicate that the selling pressure is easing and the price is preparing for another move higher.

If history repeats itself, Dogecoin price could rally towards the $8 – $10 price range in the next breakout. These levels were last seen as resistance during the meme coin’s parabolic advance in early 2024.

However, if the price breaks below the 50-day EMA (dotted blue line on the chart below), it could indicate a shift in the short-term trend and might lead to a deeper pullback towards the 200-day EMA (dotted yellow line) at $0.28.

Overall, the technical outlook is bullish, suggesting that Dogecoin price could continue to rise in the coming weeks. However, a short-term dip to $0.32 – $0.34 could occur to gather liquidity before the next move higher.