Dog-themed meme coin DOGE encountered resistance near $0.1797, reaching a recent high after Donald Trump voiced his support for Elon Musk at his rally in New York. Since reaching this resistance level, the token has fallen 3.34% in the past 24 hours, giving it a market cap of $24.8 billion. Supporting this bearish outlook, technical indicators on the daily chart suggest a possible trend reversal if the cryptocurrency enters overbought territory.
DOGE Technical Fix Tips
One such indicator is Bollinger Bands. Bollinger Bands indicate high volatility in price as the band continues to widen, and DOGE’s value is around $0.1725 near the upper band. This position places the token in overbought territory, increasing the likelihood of a correction. If a pullback occurs, potential support lies near the middle band at $0.1365, which could allow the cryptocurrency to stabilize before the uptrend resumes.
The Relative Strength Index reflects Bollinger Band analysis, further supporting the overbought assessment. As observed on TradingView, the indicator peaked at 79.15 yesterday, marking an almost eight-month high since March 4th. However, this RSI level has dropped to 73.38 today, reinforcing the possibility of a short-term market correction.
However, despite these signs of a possible reversal, other indicators suggest that bullish momentum will continue. For example, the Directional Movement Index (DMI) shows that bulls currently have the upper hand, with a +DI of 40.0231 above the -DI of 9.4867. The strength of this trend is further highlighted by the ADX value of 36.4551, suggesting that the uptrend may persist in the short term and could lead to further gains before a correction materializes.
Large holders express mixed feelings on DOGE: What next?
As cited in CryptoNewsZ’s analysis, Dogecoin continues to experience significant changes in the inflow and outflow of large holders, suggesting that market sentiment towards the cryptocurrency is mixed. At the time of writing, inflows are surging, with a 7-day change of +75.19% and a 90-day gain of +435.16%, as large DOGE token holders brace for future trading activity. This indicates that there is a high possibility that you are accumulating or preparing.
This accumulation coincides with Memecoin hitting resistance near $0.1797, which could be a potentially bullish sign if the accumulation continues. On the other hand, outflows show an even steeper increase, with a 7-day increase of +510.14% and a 90-day volatility of +230.19%. This suggests that some large holders are taking profits at current levels, exerting selling pressure that could lead to a price correction.
These contrasting trends in inflows and outflows support a cautious outlook. While some accumulation is evident, the significant outflow coincides with technical indicators such as an overbought RSI and widening Bollinger Bands, suggesting a possible downside.
Is pullback valid?
The $0.17 resistance level, a historically strong barrier, has caused the token’s price to drop multiple times upon contact, suggesting that the meme coin may have a hard time breaking through it. . Furthermore, as outflows of large holders have significantly exceeded inflows, this imbalance suggests a possible price correction.
In such a scenario, the key support level lies around the $0.1595 and $0.1453 fair value gap, with further support at the middle arm of the Bollinger Band at $0.1365. However, above $0.1797, the bullish momentum will pick up again and it could head towards the $0.22 level, which is in line with the 1.414 Fibonacci extension level, in the near term.
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