Dogecoin’s price action on the daily timeframe is starting to show early signs that the downtrend may be losing momentum. The king of meme coins has been trading with months of declining price movement, but technical analysis shows it is now printing a technical setup that might become a turning point. A developing double-bottom structure combined with a clear RSI divergence is shifting attention back to the possibility of a reversal, even as Dogecoin’s price action is compressed near long-term support around $0.12. RSI Divergence Shows Weakening Bearish Momentum The most notable development comes from the Relative Strength Index on the daily chart. Technical analysis shows that while Dogecoin’s price is now revisiting the same support region around the $0.12 zone, the RSI failed to make a new low. Instead, it formed a higher low, which created a bullish divergence between momentum and price. Related Reading: The Macro Wave 5 Move THat Could Trigger 3,000% For Dogecoin Price This divergence shows that sellers are no longer pushing price lower with the same strength seen earlier in the downtrend. This development is notable because similar RSI behavior has often preceded relief rallies for Dogecoin when paired with strong structural support. Furthermore, Dogecoin’s price action appears to be creating a double bottom along the lower boundary of a descending channel, as shown in the chart below. This type of structure is pointing to exhaustion on the sell side behind the scenes. The longer Dogecoin’s price holds above this base, the stronger the argument becomes that accumulation is taking place. The reversal outlook is based on whether Dogecoin can reclaim and hold above $0.16. A confirmed move above it would validate the RSI divergence and double bottom, although it won’t be until Dogecoin is able to break above $0.31 that the real rally will begin. Fractal Points To An Incoming Expansion Technical analysis of Dogecoin’s higher-timeframe chart introduces a compelling historical parallel that sees the memecoin pushing well above $0.31. Particularly, Dogecoin is printing a fractal on the weekly candlestick chart that looks like one that preceded a 331% breakout in late 2024. Related Reading: Dogecoin RSI Just Entered Historical Oversold Levels Again, Will It Repeat 2021? In that prior instance, Dogecoin spent months grinding lower, formed a rounded basing structure, and then launched into a near-vertical move once momentum flipped. The current structure shows a similar rounded recovery attempt followed by a controlled pullback into long-term support. At the time of writing, Dogecoin is trading at $0.1221. As shown in the chart below, the current price action is now sitting at the base of what could be the next vertical leg higher if the fractal continues to play out as expected. Although there is still a need for confirmation, these analyses indicate that Dogecoin may be transitioning out of its corrective phase and positioning for a much larger move ahead. Featured image from Peakpx, chart from Tradingview.com
