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In a remarkable turn of events, meme coin Dogecoin is now signaling a sell for future corrections after rallying 30% in seven days.
The Dogecoin price has done just that has experienced an unprecedented rally in October, surprising many investors who were on the sidelines. However, according to an analysis by crypto analyst Ali Martinez, the meme coin could experience a price correction in the short term before an IPO. continuation of the upward trend.
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His insights are based on the signal from the TD Sequential indicator, a technical tool known for identifying market exhaustion points.
Dogecoin may have been overbought
In one recent post on XMartinez highlighted the TD Sequential setup on the Dogecoin/TetherUS daily candlestick chart. This analysis shows that Dogecoin is currently experiencing its ninth consecutive bullish close on the daily candlestick, which corresponds to the ninth count of the TD Sequential indicator. While this continued rise in the Dogecoin price is impressive, it also indicates that the meme coin may be reaching a pivotal moment where a price recovery could take place.
In addition to the warning, this sell signal coincides with a newly established overbought condition for Dogecoin. The Relative Strength Index (RSI) has shown that the recent buying momentum has pushed Dogecoin deep into overbought territory.
At the time of writing, the RSI 14 close is at an elevated 75.80, having recently peaked at 78.36, its highest level since March. This overbought situation indicates that the buying frenzy may be unsustainable, increasing the likelihood of a rapid pullback.
Is it time to sell DOGE?
Martinez’s observations serve as a crucial 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, which translates to a drop of 2.3% in a few hours. Despite this, the meme coin has still posted a 29% gain over the past seven days.
Nevertheless, it is crucial to remain patient with Dogecoin’s prospects, especially as the RSI now points to an overbought condition. On the other hand, Dogecoin is not the only cryptocurrency that is in an overbought situation as the entire market is now in a greed situation, according to the Fear and Greed Index.
If the 24-hour correction for DOGE were to continue through the rest of the weekend, it could culminate in a break below $0.14 and a return to $0.13 in the near term.
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The public’s attention and discussion around Dogecoin remain in place highest level since March. This suggests that any corrections may be temporary, and there is a good chance that the uptrend will resume as the new week progresses. According to a crypto analyst Dogecoin is on track for a price rally with a return of more than 400%.
Featured image from Medium, chart from TradingView
