DYDX prices surged 32% on Sunday, driven by hype surrounding dYdX Day in Dubai. The rally attracted significant attention from investors.

However, the recent rebound does not necessarily mean the start of another long-term uptrend. As profit-taking behavior begins to affect the market, price increases may face challenges.

DYDX investors start to take profits

Investors have begun locking in profits after a weekend surge in stock prices. A measure of realized profits rose sharply for the first time since March, hitting a seven-month high.

This sudden wave of profit-taking could drag the price of DYDX down as a large number of traders take action to secure their gains. Historically, this behavior often leads to a temporary downturn in the market as selling pressure increases.

The market sentiment is bearish as many investors are taking profits. The influx of selling could have a negative impact on the price of DYDX, especially when more traders are looking to sell their holdings. This pattern suggests that the recent rally could lose steam, leading to a further correction in the market.

From a technical perspective, DYDX’s momentum appears vulnerable. The relative strength index ( RSI ), a key indicator of overbought and oversold conditions, is currently in the overbought territory.

This is unusual for altcoins and usually indicates an impending pullback in the asset’s price. In the previous example, when the RSI entered this area, the price of DYDX fell shortly thereafter.

Given the elevated RSI levels, a similar outcome is expected this time around. If overbought conditions persist and there is no strong catalyst to push prices higher, DYDX could face increasing selling pressure, leading to lower prices.

DYDX Price Prediction: Focus on Not Losing Money

Following a 32% surge on Sunday, DYDX’s price stabilized below the key resistance level of $1.33. However, today alone, the asset is down 6%, largely due to the aforementioned profit-taking. This pullback suggests that the recent rally may have peaked.

Considering these factors, DYDX could face further bearish pressure. The altcoin could lose support at $1.16, which is a critical level. If this happens, the next important support is located at $0.91, which could lead to a larger decline, erasing the recent gains.

If DYDX successfully rebounds off the $1.16 support, it could retain some of the recent profits. A successful rebound would provide DYDX with another opportunity to break above the $1.33 resistance, potentially invalidating the bearish outlook.