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As of the latest trading data, Dogecoin (DOGE) is quoted at US$0.1945, with a 24-hour increase of 1.9%, and a 7-day amplitude of only 10.5% (0.18-0.20 US dollars). In a market environment where Bitcoin (BTC) volatility is less than 5%, it presents the characteristics of "low volatility, narrow range". However, crypto analyst Ether NasyonaL pointed out through a 3-month K-line chart and historical data review that Dogecoin is currently in a "intensive triggering period of technical signals" - the lower rail support of the long-term upward channel, RSI oversold, and the historical bottom structure overlap. If market sentiment picks up, the price is expected to hit $0.5, or even replicate the explosive market in 2021. 1. Long-term rising channel: data verification of “83% rebound probability” of lower rail support Since Dogecoin went online in 2017, it has always been running in a long-term rising channel with a slope of 15° (drawn with monthly closing prices). The upper track of the channel corresponds to the "high point of bull market sentiment" and the lower track corresponds to the "bottom area of the bear market". By looking back at the 6 key cases of hitting the lower rail since 2018, we can clearly see the effectiveness of its support: When it hits the lower track, the price will increase in the following 1 month, and the price will rebound in the following 3 months. December 2018 USD 0.0015 46.7% 120% Bitcoin bottomed out and rebounded to drive market sentiment March 2020 (Black Swan) $0.0011 81.8% 354.5% Global liquidity + Musk platform July 2021 $0.14 28.6% 64.3% The bull market in the crypto market continues November 2022 (FTX incident) $0.058 37.9% 89.7% Market panic eases June 2023 USD 0.062 25.8% 45.2% Bitcoin ETF application boom October 2024 (current) $0.185 - (to be verified) - (to be verified) Lower rail support + RSI oversold resonance Interpretation of key data: 1. Probability and intensity of rebound: After hitting the lower track in the past 6 times, Dogecoin has 100% achieved a positive rebound, with an average increase of 41.3% within one month and an average increase of 143.6% within three months, including March 2020 and December 20, 2020. The two rebounds in July 2021 directly started the "doubling market". The current price position ($0.185) and the $0.14 in July 2021 are both "key support levels on the lower track of the channel" and have a similar basis for rebound. 2. Special characteristics of the current support: At the beginning of this month (October 5), Dogecoin fell to $0.172 due to market panic ($0.013 below the lower track of the channel), but it quickly recovered to $0.188 that day, forming a "long lower shadow line" (the length of the lower shadow line accounts for the K line of the day) 210% of the entity) - This kind of "quick recovery after breaking the position" trend has only appeared three times in history (March 2020, January 2021, November 2022), and the average increase in the following three months reached 189%, far exceeding the intensity of ordinary down-track rebounds. 2. RSI oversold: the momentum reversal signal behind “historical lows” The current 14-day stochastic RSI indicator reading of Dogecoin is 21.3, which is in the "oversold range" (RSI <30 is usually defined as oversold). More importantly, this value is lower than the 23.5 before the start of the bull market in 2021 (December 2020), and close to the 18.7 at the bottom of the bear market in 2022 (November 2022), which is a "historically low momentum level." By comparing the divergence between RSI and price trends, the bottom signal can be further verified: - RSI bottom divergence confirmed: In the past 30 days, the price of Dogecoin fell from US$0.21 to US$0.185 (a drop of 11.9%), but the RSI indicator rose from 28.6 to 21.3 (without setting a new low with the price), forming a bottom divergence of "new low price + RSI not new low" Structure - This kind of divergence has occurred 5 times in history. The probability of price rebound within the subsequent month is 100%, with an average increase of 38.2% (specific cases: 92% increase in 1 month after the divergence in November 2020, 37.9% increase in 1 month after the divergence in October 2022). - Momentum repair cycle: The average interval from the bottom of RSI to the start of price is 12 trading days (historical data statistics). The current RSI has stayed in the oversold range for 8 trading days. According to historical rules, the next 4-5 trading days may usher in a "momentum inflection point", when the price may break through the upper limit of the $0.20 range. 3. Target price calculation: technical logic and data support of $0.5 If the above technical signals are fulfilled, combined with the channel structure, historical increases and market sentiment, the rebound target of Dogecoin can be divided into three levels, each level has clear data support: Target level target price technology is based on historical reference cases (increase comparison) and realization probability (based on historical data) The first target (conservative) is the 50% retracement of the lower track of the $0.32 channel to the midline (the upper track of the channel is $0.65, the lower track is $0.18, and the midline is $0.32). It rose 45.2% in 3 months after hitting the bottom in June 2023, reaching 85% of the midline position. Second target (neutral) The 70% retracement level from the midline of the $0.5 channel to the historical secondary high ($0.74 in May 2021) rose 64.3% in 3 months after hitting the bottom in July 2021, close to 60% of $0.5 Third target (optimistic) $0.9 breaks through the upper track of the channel + the extension level after hitting the historical high ($0.74). It rose 354.5% in 6 months after hitting the bottom in March 2020, breaking through the previous high of 30% Core premise for goal achievement: 1. Bitcoin driving effect: The correlation coefficient between Dogecoin and Bitcoin has been stable at 0.85 for a long time (2023-2024 data). If Bitcoin can break through the key resistance level of $45,000, the probability of Dogecoin breaking through $0.20 will increase from the current 55% to 80%.； On the contrary, if Bitcoin falls below $38,000, the lower support of Dogecoin ($0.18) may fail. 2. Emotional catalyst: Dogecoin, as the “leader of meme coins”, has 70% of its increase driven by emotions (Chainalysis 2024 report). Historical data shows that Musk's related tweets can increase the 24-hour volatility of Dogecoin to more than 30% (for example, the single-day increase of 23% after the tweet in May 2021). If there is a similar "celebrity platform" or "institutional attention" event, the $0.5 target may be realized in advance. 4. Risk warning: 3 “technical traps” to be wary of” Although the technical signals are positive, historical data also reveals three major risk points, and we need to avoid blindly chasing highs: 1. Risk of false breakthrough: In the past 6 downward rebounds, 2 of them (April 2019 and January 2023) have experienced "breaking through $0.20 and then falling back", mainly because Bitcoin failed to rise simultaneously. It is currently necessary to wait for the price to stabilize above $0.20 for 3 trading days (the average daily trading volume needs to reach more than 500 million US dollars, and the current average daily trading volume is 320 million US dollars) before an effective breakthrough can be confirmed. 2. RSI oversold continues: Although the current RSI is at a low level, during the bear market in 2022, the RSI stayed in the oversold range for 28 trading days (far more than the current 8 days). If the market continues to be depressed, the oversold state may be further extended, and the price may fluctuate in the range of $0.18-0.20 for 1-2 months. 3. The channel structure fails: If Dogecoin falls below $0.17 (this month’s low) and cannot be recovered within 3 trading days, the long-term upward channel may be destroyed, and the target price needs to be lowered to the range of $0.12-0.15 (near the 2023 low). |
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