Dogecoin‘s recent price surge to $0.1491 has pushed the Relative Strength Index (RSI) into overbought territory, signaling a potential shift in momentum. As the RSI climbs above 70%, it suggests that the token may be overvalued, raising the possibility of a price correction. As buying pressure slows, market participants are beginning to brace for a corrective move, making this a pivotal moment for DOGE’s price trajectory.
This article aims to analyze Dogecoin’s recent rise to $0.1491, with the RSI signaling overbought conditions. It will assess whether the rally has peaked and if a potential decline is imminent, providing insights into key technical indicators, market reactions, and the likelihood of a near-term price correction for DOGE.
RSI Hits Overbought Territory: What It Means For Dogecoin
On the 4-hour chart, despite trading above the 100-day Simple Moving Average (SMA), Dogecoin’s price is showing signs of a bearish reversal after failing to break above the $0.1491 resistance level. This inability to push past the key level has triggered selling pressure, suggesting that the bullish momentum may be losing steam and that the asset may retrace toward lower support levels, signaling a potential short-term correction in the market.
Additionally, the 4-hour Relative Strength Index (RSI) is around 80%, well above the 50% threshold, indicating that DOGE is overbought and has experienced strong upward movement. However, this elevated RSI suggests that a pullback may be due to decreasing buying pressure.
On the daily chart, DOGE is exhibiting signs of weakness, highlighted by the rejection wick on the current candlestick. This wick indicates that buyers tried to drive the price up but encountered strong selling pressure signaling that the bullish momentum may be weakening. If this trend continues, further downward movement may occur in the coming days.
Finally, the 1-day RSI for Dogecoin is signaling a potential price reversal, with the signal line rising to 78%, indicating an overbought condition. Typically, this high RSI level reflects strong buying pressure and significant upward strength in recent trading sessions. However, being in the overbought zone suggests that a correction or pullback may be imminent, as profit-taking by buyers and renewed selling pressure could occur.
Can Bulls Maintain Control Amid Overbought Signals?
The future direction of DOGE depends on the bulls’ ability to sustain control in light of overbought signals from technical indicators like the RSI. Should the bulls manage to maintain their momentum and push the price above $0.1491, it could open the door for additional upward movement toward key resistance levels.
However, if the bulls fail to sustain their strength, it could lead to a pullback or correction, causing the price to decline toward the $0.1293 support level. A breach below this level may trigger further downward movement, pushing the price toward several support ranges.
Featured image from Adobe Stock, chart from Tradingview.com