Small investors seem to be FOMOing into buying Dogecoin (DOGE) recently, which could hint at a short-term pullback before resuming the uptrend.
Dogecoin’s RSI indicator is currently rebounding from the oversold zone on the 4-hour chart, showing certain recovery signals.
Recently, retail trading volume of Dogecoin has surged, indicating that a large number of small investors are actively participating in the market.
Analysts believe that this phenomenon may be due to the entry of too many retail investors. Historical experience shows that this situation often indicates that there may be a price correction in the short term, as happened in May 2024, January 2023, and May 2021.
Market analysts believe that the recent increase is primarily driven by FOMO sentiment, which may trigger a strong sell-off and possibly lead to market manipulation aimed at clearing out those who entered late.
This potential correction could pave the way for a subsequent strong rise of Dogecoin (DOGE), possibly even pushing it to break historical highs.
Analysts point out that such cyclical fluctuations are very common in the highly volatile meme coin market, where sentiment-driven trading often leads to significant price swings.
Now, the enthusiasm of retail investors is driving a sharp increase in interest in Dogecoin, and the market seems to be preparing for a major movement soon.
Additionally, Dogecoin set a new record for total trading volume across all exchanges, reaching an all-time high in November 2024.
This surge in trading activity reflects investors' interest in this meme cryptocurrency being stronger than ever, even surpassing the trading volume records of early 2021 and mid-2023.
With a significant increase in trading volume, price volatility has also intensified, indicating a notable increase in market participation, with DOGE's price undergoing significant fluctuations.
This trend was particularly evident in November, with a substantial increase in trading volume in both spot and futures markets, highlighting strong participation from global traders.
The active trading of Dogecoin (DOGE) indicates that new interest is emerging in the cryptocurrency space, potentially making DOGE a focal point for attracting more attention and investment.
DOGE continues to attract various participants, supported by the foundational community and extensive media coverage, helping it maintain significant appeal in a volatile market.
DOGE Price Prediction
With the FOMO effect among small investors, DOGE may face a round of corrections to clear out some newly entered investors. However, a strong surge may follow, pushing the price to new highs.
From the 4-hour chart, DOGE's price action is quite evident, accompanied by substantial trading volume. Notably, the chart marks two strong rises, with DOGE having previously surged, and similar rises are expected in the future.
During the first rise, the price increased from about $0.125 to $0.175, a rise of 40.42%.
The second rise was even more astonishing, with the price soaring to $0.43, a rise of 208.59%. If this trend continues, DOGE may rise another 208.58%, breaking the $1 barrier.
These rises coincide with the RSI (Relative Strength Index) dropping into the 'oversold' region, which is often a potential buy signal that many traders may have seized.
Each time the RSI falls into the oversold zone, a strong rebound typically follows, indicating strong buying pressure in the market after experiencing large-scale sell-offs.
As of the writing of this article, the RSI remains in the oversold zone, indicating that if past trends continue, DOGE may experience another potential wave of increases.