Dogecoin Price Hits Resistance at $0.25: Correction Or Rally Ahead?
Key Insights:
- The potential reason behind the DOGE price decline is the overstretched price and the RSI, which had entered overbought territory.
- 75.08% of traders on Binance are long on DOGE, while 24.92% are on the short side.
- Whale transaction volume has soared by 42%, indicating strong interest and confidence in the meme coin.
After a notable 50% rally, Dogecoin price has reached a key resistance zone at $0.25, suggesting a potential correction. Earlier breakouts from an inverted head-and-shoulders pattern and a descending trendline helped drive the uptrend.
Now, the price seems overstretched. As a result, DOGE may be entering a corrective phase before attempting further upside.
Current Market Sentiment & Dogecoin Price Momentum
At press time, Dogecoin price was trading near $0.226 and had recorded a price decline of over 3.95% in the past 24 hours. The price drops at a key resistance level drew strong interest from traders and investors. This led to a spike in market participation.
According to CoinMarketCap data, the meme coin’s trading volume surged by 45% compared to the previous day during this period. This surge in trading volume, while declining prices indicate strong downward momentum. This could continue in the coming days.
DOGE Technical Analysis & Technical Analysis
According to expert technical analysis, the DOGE meme coin appears bullish. However, in the shorter time frame, it may experience a price correction due to its overstretched rally in recent days.
The daily chart shows that Dogecoin price faced selling pressure at this level before. This led to further downward momentum in price. However, sentiment has shifted this time, and though it may see a correction before initiating a further upside rally.
If Dogecoin price stays above the $0.2215 support level, it may keep its bullish momentum. Historical trends suggest strength at this price point. This could help it break through resistance.
If DOGE drops below $0.22 due to shifting sentiment, further decline may follow. The price could fall to $0.205 in the coming days.
If DOGE breaks above $0.255 and closes strong, it could trigger an extended rally. A successful breakout may push the price higher. DOGE could gain 25% and reach $0.32.
The overstretched price and the Relative Strength Index (RSI) are potential reasons for the ongoing correction. It had entered overbought territory.
DOGE’s RSI stood at 51, near the neutral zone, neither overbought nor oversold. In such cases, market sentiment and the views of traders and investors could push the price in either direction.
Bullish On-Chain Metrics
Despite the bearish outlook, whale and institutional participation have skyrocketed. Whale transaction volume has surged 42% in the last 24 hours, according to IntoTheBlock. This signals strong interest and confidence in the meme coin.
Daily active addresses have also increased by 34.91%. This signaled a surge in trader and investor activity in the DOGE meme coin.
The rise in whale transaction volume signals a bullish trend. Coinglass reports that long-term holders and investors have been accumulating the meme coin.
Exchanges recorded a $15.37 million DOGE outflow in the last 24 hours. Spot inflow/outflow data suggests this could signal accumulation. Current market conditions may drive buying pressure. This trend could fuel a further upside rally.
Meanwhile, the Binance DOGEUSDT long/short ratio is 3.01, indicating strong bullish sentiment among traders. On-chain data shows that 75.08% of top Binance traders are bullish. Meanwhile, 24.92% have taken short positions.
When combining these on-chain metrics with technical analysis, it appears that bulls dominate despite the ongoing price correction. Some see this as an opportunity and buy the dip, while others strongly believe in the bullish market sentiment.
