The price action of Dogecoin on the daily time frame is is starting to show early signs that the downtrend may lose momentum. The king of meme coins has been trading with months of decline price movements, but technical analysis shows that a technical setup is now being printed that could become a turning point.
A developing double bottom structure, combined with a clear RSI divergence, shifts attention back to the possibility of a reversal even as Dogecoin’s price action is compressed close long-term support around $0.12.
RSI divergence shows weakening bearish momentum
The most remarkable development comes from the Relative Strength Index on the daily chart. Technical analysis shows that although Dogecoin price is now visiting the same support area around the $0.12 zone, the RSI has failed to make a new low. Instead, it formed a higher low, creating a bullish divergence between momentum and price.
Related reading
This divergence shows that sellers are no longer lowering the price with the same force as earlier in the downtrend. This development is notable because similar RSI behavior often preceded relief rallies for Dogecoin, coupled 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 indicating exhaustion the sales side behind the scenes. The longer Dogecoin’s price remains above this base, the stronger the argument becomes that accumulation is taking place.
The reversal outlook is based on whether Dogecoin can recover and hold above $0.16. A confirmed move above would confirm the RSI divergence and the double bottom, although the real rally will only begin if Dogecoin can break above $0.31.
Fractal hints at an upcoming expansion
Technical analysis of Dogecoin’s higher timeframe chart introduces a compelling historical parallel in which the memecoin breaks well above $0.31. In particular, Dogecoin prints a fractal on the weekly candlestick chart that resembles one that preceded a 331% breakout in late 2024.
Related reading
In that earlier case, Dogecoin spent months grinding lower, forming a rounded base structure and then launching a near-vertical move once the momentum shifted. The current structure shows a similarly completed recovery attempt, followed by a controlled return to 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 is now the basis of what could be the next vertical leg higher if the fractal continues to play as expected. Although it is still in need of confirmation, these analyzes indicate that Dogecoin may be emerging from the corrective phase and positioning itself for a much bigger move forward.
Featured image of Peakpx, chart from Tradingview.com