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Anonymous trader "Guangdong Cat" X posted on Wednesday that the Dogecoin daily chart suggests the "meme coin" might be recovering after months of decline. At UTC 02:26, the TradingView snapshot showed Dogecoin trading at $0.16979, slightly down, with a 14-period Relative Strength Index of 35.72, slightly above the typical oversold zone.
Bullish Divergence in Dogecoin
The most notable feature of the chart is a series of bullish divergences - where the RSI indicator reaches higher lows while price lows continue to decline. The Cantonese Cat's chart shows three such turning points: the first in August 2024, the second in March and April 2025, and the last in mid-June.
Historically, the first signal appeared before an autumnal parabolic rebound that propelled Dogecoin from the $0.05 high area to an intraday high just below $0.23, an increase of nearly 300%. The March divergence triggered a 100% rebound to the $0.26 area, where previous support now serves as resistance.
"Dogecoin Daily - RSI Bullish Divergence," wrote the Cantonese Cat in his post, letting annotated arrows speak louder than words. The inserted diagram on the chart's right side emphasizes the textbook definition: in the highlighted quadrant, price slopes downward while momentum slopes upward, a pattern typically interpreted as buyers quietly absorbing supply.
Descending Channel and Key Support Line
The current structural context enhances the significance of this signal. Since breaking the $0.48 peak in November, the price has been retracing within a downward channel. Within this broader channel, Dogecoin is currently retesting the previous downward resistance line - which served as strong resistance in March and April - ultimately breaking through in early May, now serving as a key support around $0.163.
This retest is slightly below the multi-year upward trend line, currently positioned around $0.142. If both these levels break, the true lower boundary of the downward channel will be just below $0.139, leaving bulls with only a narrow buffer of about 3 cents.
From a Fibonacci perspective, the 0.786 retracement level (at $0.1826) - along with the 20-day and 50-day exponential moving averages and the channel midline at $0.172 - constitute the first upper limit that must be breached to shift recent momentum. Breaking this area will expose the 0.618 level (at $0.247) and the 100-day moving average. Subsequently, resistance levels at the 0.5 retracement ($0.292), 0.382 ($0.338), and 0.236 ($0.3939) will appear, each corresponding to previous congestion zones during the winter rally.
As the price approaches support, volume begins to shrink, while the 14-period RSI remains stable around 35% - technically still oversold but slightly recovering, echoing the bullish divergence pattern marked by the Cantonese Cat. For bears, if the daily closing price definitively breaks below the multi-year trend line, it would disrupt the previous bullish divergence pattern and potentially drive Dogecoin towards the $0.135 to $0.13 liquidity zone, with a final pullback target around $0.10 - the bottom from last October.
