Since reaching a recent high of $0.48, Dogecoin [DOGE] has struggled to maintain its upward momentum. The memecoin has traded within a consolidation range between $0.42 and $0.37 since then. In fact, as of the time of writing, DOGE is trading at $0.3832. This marks a 4.11% decline on the daily chart.

The recent decline after a sustained upward trend signals a potential change in market momentum. Accordingly, renowned cryptocurrency analyst Ali Martinez sees the current market situation as a bearish signal.

Dogecoin Market Psychology Turns Bearish

In his analysis, Martinez argues that Dogecoin's market sentiment has turned negative. According to him, it seems that traders have become impatient with the current price consolidation.

The shift in market sentiment from bullish to bearish reflects the exhaustion of buyers as sellers dominate the market.

Typically, when sellers dominate, selling pressure is high and supply exceeds demand, thus pushing prices down.

This dominance among sellers is evidenced by the fact that DOGE's RSI has decreased over the past 10 days. This indicates that most investors are selling to capitalize on recent profits and avoid further losses.

According to Coinglass, short sellers are dominating with 54% in the 24-hour timeframe and 64% in the 4-hour timeframe. This implies that most investors are betting on further price declines.

What Does the DOGE Chart Suggest?

As observed above, the current market sentiment suggests that DOGE may continue to decline as the upward momentum has exhausted.

First of all, we can see the exhaustion and strengthening of the downtrend with the decline of +DI. With the positive index undergoing continuous decline, this indicates that the market's upward momentum has waned while the downtrend is strengthening.

Additionally, Dogecoin's DAA price divergence remains negative over the past week. This implies that most investors are staying away from this asset.

With Dogecoin witnessing a shift in market sentiment, the memecoin may see further losses on its price chart. Therefore, if these conditions persist, DOGE could drop to $0.367.

However, if this price drop creates a buying opportunity and buyers return, the memecoin could recover and reclaim the resistance level of $0.40.

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