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In a notable change, the meme coin Dogecoin now flashes a sell signal for a pre-correction after a 30% rally in seven days.
The price of Dogecoin has he was in an unprecedented gathering in October, taking many investors who have gone aside by surprise. However, according to crypto analyst Ali Martinez, the meme coin may actually be price adjusted in the short term before buying. continuation of the uptrend.
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His insight is based on the signal provided by the TD Sequential indicator, a technical tool known for identifying market endpoints.
Dogecoin May Be Overbought
In a the latest post on XMartinez highlighted a TD Sequential setup on the Dogecoin/TetherUS daily chart. This analysis reveals that Dogecoin is currently experiencing its ninth consecutive bullish daily candlestick, aligned with the ninth count by the TD Sequential indicator. While this steady growth in the value of Dogecoin has been impressive, it also shows that the meme coin may have reached a critical point where a price recovery may occur.
In addition to caution, this sell signal is consistent with the recently established overbought condition of Dogecoin. The Relative Strength Index (RSI) showed that recent buying momentum has pushed Dogecoin deeper into overbought territory.
At the time of writing, the RSI 14 is closing at a high of 75.80, having recently reached 78.36, its highest level since March. This overbought condition suggests that the buying frenzy may not be strong, raising the possibility of an immediate pullback.
Is It Time To Sell DOGE?
Martinez’s comments serve as an important reminder of Dogecoin’s volatility heading into the new week. At the time of his analysis, Dogecoin was trading at $0.14575. However, at the time of writing, Dogecoin has fallen to $0.1424, translating to a decrease of 2.3% in a few hours. Despite this, the meme coin is still gaining 29% in the last seven days.
However, it is important to remain patient with Dogecoin’s outlook, especially since the RSI is now pointing to an overbought condition. On the other hand, Dogecoin is not the only cryptocurrency in an overbought state, as the entire market is now in a greedy state, according to the Fear and Greed Index.
If DOGE’s 24-hour correction were to extend through the weekend, it could break below $0.14 in the short term and return to the $0.13 area.
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Crowd attention and discussions surrounding Dogecoin are always there the highest level since March. This suggests that any correction may be temporary, and there is a high chance that the upswing will resume as the new week unfolds. According to one crypto analyst, Dogecoin is on the way with a price rally with over 400% returns.
Featured image from Medium, chart from TradingView
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