In the past week, Dogecoin (DOGE) has shown strong buying pressure increasing by 27%. However, when looking at the 1-day chart, we see that the resistance potential suggests that the price rally could cause a reversal in the short term.
DOGE Daily Chart Analysis: Resistance and Support Levels
For the 1-day chart, the price of Dogecoin is currently at $0.19216. This is 2.19% lower than the daily high of $0.20435.
Despite the upward trend indicated on the weekly chart, the daily chart shows that DOGE could decline if the price falls below the upper Bollinger band at $0.19082.
This implies that the ongoing bullish momentum may be weakening and traders may take profits at this price level.
The 20-day Simple Moving Average (SMA) is at $0.15595. This is a good support level that could prevent DOGE from declining further if the retracement continues.
Any retracement in this SMA will not be considered a bearish signal but rather a potential adjustment to the ongoing bullish trend. However, to keep the short-term bullish outlook intact, DOGE must stay above this 20-day SMA.
Bollinger Bands Indicate Increasing Volatility and Potential Resistance
When looking at the upper Bollinger band on the daily chart, one can observe that DOGE has experienced high volatility recently. DOGE has risen above the upper Bollinger band at $0.19082, indicating higher buying pressure.
However, a quick retracement from this level suggests that DOGE may face challenges in maintaining bullish momentum. This is because the price has surpassed the upper Bollinger band. This is often followed by a peak in short-term buying pressure.
RSI Indicates Overbought Condition, Signaling Potential Adjustment
The relative strength index (RSI) on the daily chart is currently at 71.83. Exceeding the overbought zone at 70.
An RSI above 70 typically indicates an overbought condition, therefore, a short-term price reversal may occur as traders take profits. If the RSI falls below 70, this will further confirm a decrease in bullish pressure and may indicate a retracement phase. For a long-term bullish momentum, the RSI should consolidate around the 60-70 range instead of staying in the overbought territory.
What Experts Are Saying About DOGE
Dogecoin has recently attracted a lot of attention, and market analysts have differing opinions. According to analyst Ali, with the surpassing of key resistance levels, Dogecoin could reach new highs and even go higher.
He continues to make long-term price predictions, suggesting that if Dogecoin follows the major patterns of previous bullish cycles after surpassing the 0.50 Fibonacci retracement level, its long-term price could range from $4 to $23. He also claims that the current well-known confirmation may have contributed to the price of Dogecoin.
However, other analysts are beginning to sound the alarm. They warn that investors may be overloading their portfolios with Dogecoin, which could pose significant risks in the event of a price reversal.
Due to the inherent instability of the cryptocurrency market, these analysts warn that the recent surge of Dogecoin may only last for a short time, especially if profit-taking activity increases around the current resistance level.
