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

Dogecoin price has been struggling to exit its March and April bottom range so far. But could the king of the meme coins build up bullish momentum and find its way back on the recovery path especially after a failed rally attempt?

Just like most of top coins, Dogecoin price enjoyed some relieve from the bears since the second week of April.

However, weak demand ensured that it struggled to bounce back strong and has mostly been moving sideways.

Despite Dogecoin price struggling to maintain an upward recovery trajectory, some analysts remained optimistic about its bullish prospects.

One analysis in particular pointed out that Dogecoin parallel channels could signal that a major bounce may occur soon.

Historic price action from as far back as 2016 demonstrated that multiple parallel channels occurred lasting multiple weeks. Those channels preceded a major price move.

DOGE price has so far experienced three major parallel channels since 2023. The latest one was the pullback from December highs and it was also the steepest.

The analysis suggests that those parallel channels could usher in a major move to the upside.

Will RSI Divergence Still Pave The Way for Another Bullish Move For Dogecoin Price?

DOGE price achieved a lower low at the end of the first week of April, compared to its lowest price in March.

Meanwhile, the corresponding RSI lows formed a divergence that was expected to trigger a bullish move.

A price-RSI divergence usually signals a potential pivot ahead. However, Dogecoin’s performance last week was relatively sideways hence it did not achieve much upside. This raises questions especially on whether the meme coin could still achieve a rally.

A bullish outcome would not only align with the price-RSI divergence but also with the parallel channels.

Multiple indicators have so far pointed to the possibility that DOGE price may regain its bullish momentum.

Among them include the MFI’s upside during the weekend which indicates that the pace of liquidity flow into DOGE was on the rise.

Another key observation was that spot outflows last week cooled down to levels last seen in late October 2024.

Dogecoin Derivatives Activity on the Rise

DOGE price action experienced low volatility last week but may have just kicked off this week on a different tune.

A major reason for higher volatility expectations this week was the recent surge in derivatives activity.

Derivatives volumes were up 16.57%, while options volume registered a massive 230.64% uptick in the last 24 hours. Dogecoin options open interest surged by 127.71% during the same period.

Such a significant surge in derivatives activity is usually associated with a surge in expectations that the underlying asset will experience a sizable directional move.

The latest activity was also accompanied by positive funding rates, which suggests that derivatives traders anticipated a bullish move.

However, such expectations also tend to pave the way for leveraged liquidations. Coinglass data revealed that Dogecoin liquidations in the last 24 hours at the time of observations surged to $2.84 million.

Majority of them ($2.17 million) were long liquidations, due to the slight dip in price within the last 2 hours.

Dogecoin’s performance underscores weak demand and its inability to bounce back strong under the prevailing uncertain conditions.

Whether the king of the meme coins will bounce back strong remains to be seen. DOGE was one of the best performing coins during the Q4 2024 rally but it has since given up those gains.

However, the memecoin along with the rest of the crypto market at large are held back by shifting economic conditions which have not been favorable for risk-on assets.

And with the possibility of rate cuts happening, the prospects of a strong short-term bounce back have been diminishing.