Dogecoin is currently at a critical juncture, with its price hovering around $0.3563 and the relative strength index (RSI) showing that it is already oversold.
This means that the recent sell-off may have caused the asset to be undervalued, thereby increasing the probability of a rebound.
However, it remains to be seen whether bulls will be able to seize this opportunity to push prices back up.
Given the weakness in the market, $0.3563 has become a key level to watch. How Dogecoin reacts in the coming sessions could set the tone for any significant moves ahead.
Understand current price action and overbought RSI signals
Judging from the current price trend, although Dogecoin is trading below the 100-day simple moving average (SMA), it still shows relatively good signs of bullish momentum.
The meme coin has regained strength in a short period of time, revealing the possibility of an upward trajectory as it attempts to hit the overhead resistance level. It is particularly noteworthy that this trend reflects that the buyer's interest is gradually heating up. Once it breaks through the key level, it may lay a solid foundation for the subsequent sustained recovery.
Although the 100-day simple moving average (SMA) often poses an important obstacle in bear markets, the resilience shown by Dogecoin (DOGE) at this time shows that bulls are struggling to regain control of the situation.
The changing price structure underscores the importance of maintaining upward momentum to achieve a bullish breakout, while its next move may be influenced by market sentiment and broader trading conditions.
The relative strength index (RSI) of Dogecoin is currently hovering around 30%, indicating that it has established a foothold in the oversold area. This technical indicator means that Dogecoin may be under great selling pressure, causing the price to fall to an undervalued level.
Typically, RSI readings at or below 30% create an opportunity for buyers to re-enter the market and trigger a rally.
While this does not guarantee an immediate recovery, it highlights the possibility of a reversal in the coming sessions, especially if other bullish signals echo each other.
Traders are watching closely for a quick rise in the RSI as it could signal a strengthening of bullish momentum and a shift in market sentiment.
Combined with the price trend near the key support level, the position of the RSI may play a decisive role in the subsequent direction of Dogecoin.
Dogecoin's rebound or continued rise?
There are two key scenarios for DOGE's current price action: a potential rebound and a sustained rise. Given that the relative strength index (RSI) is showing an oversold signal at $0.3563, a rebound is possible if bulls enter the market and take advantage of undervalued conditions to push prices higher.
If the rebound is successful, DOGE might challenge previous resistance levels such as $0.4484 and resume its upward trend.
On the other hand, if the bearish pressure continues, the cryptocurrency may find it difficult to regain control of the bullish situation, resulting in a further drop to $0.1800.
The next few trading days will be critical in determining the direction of Dogecoin, with support and resistance levels playing a key role in determining its direction.
