In the past week, Dogecoin (DOGE) has shown strong buying pressure rising to 27%. However, when looking at the 1-day chart, we see possible resistance suggesting that the rally might cause a short-term reversal
DOGE Daily Chart Analysis: Resistance and Support Levels
As for the 1-day chart, the price of Dogecoin is now at $0.19216. That is 2.19% below the daily high of $0.20435.
Despite the upward trend indicated on the weekly chart, the daily chart shows that DOGE could be bearish had the price retreated backing off from the upper Bollinger band at $0.19082.
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This implies that the continued bullish run could be weakening, with traders possibly taking profits at this price level.
The Simple Moving Average 20 (SMA) is at $0.15595. This is a good support level that can work to stop DOGE if the pullback continues
Any pullback in this SMA would not be viewed as a bearish signal but as a likely correction of an ongoing bullish trend. However, for the short-term bullish outlook to remain intact, DOGE has to sustain above this 20-day SMA.
Bollinger Bands Show Heightened Volatility and Potential Resistance
Looking at the Bollinger Bands on the daily chart, one can notice DOGE has been experiencing high volatility recently. DOGE rose above the upper Bollinger Band at $0.19082 to indicate higher buying pressure.
However, the fast pullback from this level indicates that DOGE is likely to face a challenge in sustaining the bull run. That’s because the price crossed the upper Bollinger Band. This is typically followed by a peak in the near-term buying pressure.
RSI Indicates Overbought Conditions, Signaling Possible Correction
The Relative Strength Index (RSI) on the daily chart currently stands at 71.83. This past the overbought zone at 70.
An RSI above 70 usually indicates overbought levels thus a short-term bear reversal in price could occur as traders take profit. If the RSI falls below 70, this would further confirm a dip in bullish pressure and could indicate a retracement phase.
For long-term bullish momentum, the RSI should consolidate around 60-70 levels rather than staying in the overbought territory.
What Experts Are Saying About DOGE
Dogecoin has recently attracted a lot of attention, and market analysts have different opinions According to analyst Ali, with a break through its key resistance levels Dogecoin may hit a new high and even soar higher.
He goes on to do a long-term price prediction suggesting that in case Dogecoin follows major patterns of the previous bull cycle after crossing the 0.50 Fibonacci retracement level, then its long-term price can range from $4 to $23. He also stated that the current high-profile endorsement may have contributed to the price of Dogecoin.
However, other analysts are beginning to sound their alarms. They warn investors who may be overloading their investment portfolios with Dogecoin, which could pose great risks in case of a price reversal.
Given the volatile nature of the cryptocurrency market, these analysts caution that Dogecoin’s recent gains could be short-lived, especially if profit-taking increases around the current resistance levels.