NAIROBI (CoinChapter.com)—Dogecoin (DOGE) surged to $0.399, achieving price levels last observed in late 2021. This raises concerns of a potential downturn as technical indicators flash warning signs.
The meme cryptocurrency has gained over 13% in the last 24 hours, but an overheated relative strength index (RSI) has historically preceded sharp corrections.
Dogecoin’s RSI and Fibonacci Levels Hint at a Possible 30% Crash
DOGE’s daily relative strength index (RSI) has spiked to 92.61, far above the 70 threshold signaling overbought conditions. Historically, RSI levels above 90 have preceded sharp corrections. During the Dec. 2021 rally, a similar RSI reading led to a 30% price drop over the following days.
Fibonacci retracement levels provide additional context for DOGE’s current trajectory. The token is approaching the 2.618 Fibonacci extension level near $0.426, a critical resistance point. A failure to secure a daily close above this level could result in a retracement to the 1.618 level at $0.298.
In a more pronounced downturn, DOGE might find support at its 50-day exponential moving average (EMA) near $0.166. Breaching this support could invalidate the bullish setup.
Golden Cross Fuels DOGE’s Bullish Momentum
Dogecoin (DOGE) confirmed a golden cross on its weekly chart, where the 50-week moving average crossed above the 200-week moving average. Analyst MikybullCrypto noted that a similar pattern in late 2020 led to a 7,000% rally, suggesting strong bullish potential.
Another trader, Mags sees $1.17 as a conservative target, with Fibonacci projections suggesting the possibility of reaching $2 to $4.
Further supporting this bullish outlook, Ali Martinez noted that DOGE’s price could test the middle or upper boundary of a channel, putting the token at $2.40 or as high as $18 in the long run.
CoinGlass data shows Dogecoin’s open interest surged 41.41% in the last 24 hours, reaching $3.21 billion, with Binance, Bybit, and OKX accounting for most of the activity.
Dogecoin’s recent surge reflects strong bullish momentum, but technical indicators suggest caution. Overbought conditions and key resistance levels could lead to a potential correction if the rally loses steam.
Dogecoin’s recent surge reflects strong bullish momentum, but technical indicators suggest caution. Overbought conditions and key resistance levels could lead to a potential correction if the rally loses steam.
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