The Dogecoin price has been in a correction and consolidation mode since the first week of December, after several weeks of wild gains, with the price just below $0.48. The price action over the last 24 hours and 7 days has been on a downward trend and the RSI indicator has reflected a corresponding decline.

Cryptocurrency analyst Master Kenobi recently called attention to this notable development in the Dogecoin Relative Strength Index (RSI), highlighting its earlier breakout of 90% and comparing the current bull market to the pattern observed during DOGE's 2021 rally.

Master Kenobi's recent update to X Outlines the striking similarities between Dogecoin's RSI levels in the current cycle and those observed at the beginning of the bull market in 2021. In both cases, the RSI reached 90, well above the 70 threshold for overbought conditions. In particular, the RSI indicator shows that Dogecoin prices reached overbought status in November 2024, but continued to climb until early December.

Interestingly, the peak of the 2021 rally was followed by a significant cooling, with the RSI falling to 43% and the price of Dogecoin plummeting 55% in 25 days. In addition, Kenobi highlighted that the RSI fluctuated between the two key lines of 90 and 40 readings during the 2021 Dogecoin rally, a pattern that could be repeated in the current bull market.

This time, while the RSI followed a similar reversal trajectory after reaching 90 overbought status, the price action was significantly less dramatic. In the 35 days since the RSI peaked, the Dogecoin price has experienced a smaller 28% decline, indicating that it is now more stable than in the last bull market cycle.

Currently, Dogecoin's RSI is currently around 43 and looks set to drop further to 40. While the 2021 model cannot predict what will happen next, we can get a sense of what will happen next. If the pattern repeats itself, we could see the RSI rebound to 90 readings at least two more times this cycle.

In a previous analysis, Master Kenobi noted that in Dogecoin's market cycle, the time interval between key RSI peaks is narrowing. From 260 days in the first cycle to 240 days in the second cycle, the current cycle is now 225 days. In addition, the RSI remained consistently at similar levels, suggesting a degree of predictability in its behavior.

Kenobi also highlighted that DOGE appears to be slightly ahead of the historical trend, with the RSI remaining above its moving average. This suggests that the current bull market cycle may still have room to grow, especially as the industry moves into a more crypto-friendly landscape in the U.S. and other countries.