Dogecoin (DOGE) is flashing signals of a potential price reversal, as technical indicators suggest the meme coin is in an overbought zone. According to CoinMarketCap data, DOGE is starting to reverse its gains of the last couple of days as the price loses momentum.
Dogecoin market sentiment weakening
The meme coin had climbed from $0.2582 to peak at $0.2868, but the Bollinger Bands and the Relative Strength Index (RSI) indicated overbought conditions. With the RSI at 80.56, DOGE's current position far surpasses the bullish indices of the meme coin.
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Dogecoin Daily Chart | Source: TradingView
Dogecoin’s upper Bollinger Band is within the $0.2751 price threshold, the middle band is at $0.2050, while the lower band is at $0.1349. The price range suggests that DOGE is overbought and will likely experience a significant downward price reversal soon.
As of press time, Dogecoin is trading at $0.2644, representing a 4% decline over the last 24 hours. Investor sentiment is gradually waning as trading volume is up by a slight 3.4% at $6.35 billion within the same time frame.
The downward price movement of Dogecoin is not limited to the king of meme coins alone, as the broader crypto market has seen a decline of about 1.4%. Notably, Bitcoin slipped by 0.8%, and Dogecoin’s high correlation to Bitcoin dominance contributed to the meme coin’s drop.
What's next for DOGE's price?
Interestingly, prior to this drop, Dogecoin was on a bullish rally, with a 53% spike in its third-quarter performance. It was positioning itself to break a six-year bearish trend that had trailed the meme coin every year. The current reversal could pose a challenge to that move, except for momentum shifts.
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Despite the current volatility, Dogecoin has recorded a 70.03% increase over the last 30 days, with this upward trajectory initiated on June 22. This had triggered anticipation of a possible climb to $0.40 target among some optimistic traders.
The current trading volume suggests that some investors remain hopeful of a possible recovery soon.
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