The Dogecoin performance was not exactly strong in May. After a 12.63% surge in April, the price movement has been rather steep lately, with growth constrained by the critical resistance level of $0.16.
The current price is close to April 2021 ATH of $0.17. Breaking this level could potentially lead to a massive rally to $1 or higher. Here are crucial indicators to watch if you don’t want to miss the big uptrend.
RSI
The relative strength index (RSI) measures buying versus selling pressure on a scale of 0 to 100. Values above 70 indicate an overbought market, often preceding a pullback, although prices can continue to rise in the overbought zone.
At press time, DOGE sits in the “neutral” zone, close to “weak,” with RSI index at around 50. Getting closer to 70 would mean a stronger market sentiment, with a potential bull run on horizon.
Whale activity
Monitoring large holders or “whales” is crucial as they can significantly influence prices. On May 31, Dogecoin whales bought over 700 million DOGE within 72 hours, worth around $112 million. If the surge in whale activity continues, the price is more likely to set on an uptrend.
MVRV
The Market Value to Realized Value (MVRV) ratio compares the asset’s market value to the average acquisition price, or realized price. The MVRV value of 2.0 means the current price is 2 times the market average cost basis, while 1.0 means market value and realized price are even.
The current value for Dogecoin is 1.55, according to data provided by IntoTheBlock. This means there is enough space for a potential rally right now.
GameStop signals
Dogecoin’s performance is often linked to GameStop (GME), which became known as “meme stock” in 2021. It has been noted that a surge in the GME price can trigger a DOGE bull run.
For instance, after the infamous buying spree in January 2021, when the GME price jumped 800%, Dogecoin showed an almost identical pattern.
In May, GameStop almost doubled in price, peaking at $46, compared to $11 in April.
Musk factor
Elon Musk has a history of influencing DOGE prices with his (rather obscure) tweets. On April 1, 2021, Musk tweeted about SpaceX putting a Dogecoin on the moon, propelling DOGE from $0.06 to an all-time high of $0.73 in a month.
Earlier this year, X announced that it will be transforming into an “everything app” with its own payment system. It has long been speculated that DOGE, Musk’s favorite token, could be an essential part of the X ecosystem.
With this in mind, every mentioning, however speculative, of the potential partnership resulted in a Dogecoin price surge.
SpaceX is going to put a literal Dogecoin on the literal moon
— Elon Musk (@elonmusk) April 1, 2021
Although Musk has not yet confirmed any plans to integrate Dogecoin into X, he did not reject the idea either. As Telegram is actively building its own blockchain, there is a good chance X might as well explore crypto payments this year. In any case, the potential hint from Musk can come at any given moment, causing the DOGE price to skyrocket within hours.
Price breakout
Recently, analyst Ali Martinez shared his view that the current bearish sentiment is similar to the one we witnessed in February this year, right before the price jumped 200%. This could be an indicator of a massive surge in June.
In his view, Dogecoin is encountering significant resistance between $0.166 and $0.171, with potential to double in price.
#Dogecoin is encountering significant resistance between $0.166 and $0.171, where 75,500 addresses have acquired nearly 10 billion $DOGE. However, once this barrier is overcome, #DOGE has the potential to double, with the next key resistance around $0.322 pic.twitter.com/p02Cks63EI
— Ali (@ali_charts) May 28, 2024
According to the price pattern as seen on the daily chart, Dogecoin seems to have escaped the correction zone and is ready to reverse the trend. The main question is whether the DOGE price will rebound this week or much later.