Dogecoin’s recent price rally to $0.1491 has pushed the Relative Strength Index (RSI) into overbought territory, suggesting a possible change in momentum. An RSI above 70% suggests that the token may be overvalued and increases the likelihood of a price correction. With buying pressure waning, market participants are starting to prepare for a correction move, making this a pivotal moment for DOGE’s price trajectory.
This article aims to analyze Dogecoin’s recent rise to $0.1491, with the RSI indicating an overbought situation. Assess whether the rally has peaked and whether a potential decline is imminent, providing insight into key technical indicators, market reactions, and possible near-term price corrections for DOGE.
RSI reaches overbought territory: what it means for Dogecoin
On the 4-hour chart, despite trading above its 100-day simple moving average (SMA), Dogecoin price failed to break out of the $0.1491 resistance level, indicating a bearish reversal. The inability to break above this key level causes selling pressure, suggesting that bullish momentum is losing momentum and that the asset could revert towards lower support levels, leading to a short-term correction in the market. It suggests possibility.
Dgoecoin gears up for bearish reversal after failing to break above $0.149 | Source: DOGEUSDT on Tradingview.com
Furthermore, the 4-hour Relative Strength Index (RSI) is around 80%, well above the 50% threshold, indicating that DOGE is overbought and in a strong uptrend. However, this rise in RSI suggests that reduced buying pressure may be the cause of the pullback.
On the daily chart, DOGE is showing signs of weakness, highlighted by the rejection wick on the current candlestick. This wick indicates that buyers tried to push prices higher but encountered strong selling pressure indicating that bullish momentum may be weakening. If this trend continues, further declines are possible in the coming days.
DOGE Shows Signs of Upside Weakness | Source: DOGEUSDT on Tradingview.com
Finally, Dogecoin’s 1-day RSI indicates a possible price reversal, with the signal line rising to 78%, indicating an overbought condition. This high RSI level typically reflects strong buying pressure and significant upward momentum in recent trading sessions. However, being in the overbought zone suggests that a correction or pullback may be imminent, as profit taking by buyers and fresh selling pressure may occur.
Can bulls maintain control amid overbought signals?
The future direction of DOGE will depend on whether the bulls can maintain control given overbought signals from technical indicators such as the RSI. If the bulls manage to maintain momentum and push the price above $0.1491, it could open the door for further upside towards the key resistance level.
However, if the bulls are unable to maintain their strength, it could lead to a pullback or correction, which could send the price down towards the support level at $0.1293. A break below this level could trigger further declines and push the price towards some support range.
DOGE is trading at $0.14 on 1D chart | Source: Source: DOGEUSDT on Tradingview.com
Featured image from Adobe Stock, chart from Tradingview.com
