Abstract Assessment of in-situ stresses and hydraulic fracturing stimulation are two critical parameters for successful heat extraction from Enhanced Geothermal Systems (EGS). Fracture injection and injection/flow back tests are two conventional techniques for estimating the minimum horizontal stress in subsurface formations. Because of the heat exchange during the test, ultra-low permeability of the host rock, and natural fractures, the conventional methods yield inaccurate results in geothermal reservoirs. In this paper, we present a new methodology based on the signal processing approach for analyzing DFIT in geothermal reservoirs. The applicability of our technique is demonstrated using several test data from the Utah FORGE project. The main advantage of our methodology is that it does not depend on any assumption regarding fracture geometry and rock properties. Also, unlike most similar studies, we consider the effect of heat exchange between fracturing fluid and the hot rock. In our methodology, the recorded pressure and temperature are treated as signals, and a wavelet transform is applied to separate them to high pass (noise) and low pass (approximation) components. Using the noise energy of the two signals, we then identify different events such as fracture closure. Also, an analytical technique is used to correct the pressure by extracting the effect of fluid compressibility and heat exchange between the rock and injected fluid. We show that the G-Function technique underestimates the minimum horizontal stress in tight formations. After applying the corrections for pressure, the underestimation becomes more apparent. However, our approach gives consistent results before and after the pressure correction. Using the developed technique, we analyzed several injection tests from the Utah FORGE project. Both recorded pressure and temperature have been analyzed. Results show that the energy of the pressure signal noise decreases to a minimum level at the fracture closure. The fracture closure is confirmed by applying the same technique on the recorded temperature. The moment of closure using the proposed methodology is compared to the G-function approach, before and after correction of the pressure for temperature. Unlike physics-based techniques, the proposed method does not have any pre-assumption about the fracture's geometry or type of the well. The method solely relies on the pressure and temperature signals that are recorded during the injection and shut-in periods. Combining several analysis techniques to analyze DFIT (including the analysis of monitored temperature for a geothermal reservoir) is unique and maybe the first of its kind.