Monday, March 18, 2024
HomeBitcoinElon Musk raises the price of Dogecoin again

Elon Musk raises the price of Dogecoin again

DOGE‘s price could drop 60% by the end of this year after hitting its highest overbought levels since April 2021.

Dogecoin price is up 150% in 4 days, but DOGE is now the most “overbought” since April 2021

Elon Musk raises the price of Dogecoin again

The price of Dogecoin jumped nearly 75% to $0.146 on Oct. 29, its biggest daily gain since April 2021.

Notably, the meme coin’s massive rally was part of a larger uptrend that began earlier this week on October 25th. Overall, the price of DOGE rose 150% during the October 25-29 price rally.

The increase was also accompanied by a good increase in daily trading volumes. This coincided with an increase in the number of DOGE transactions exceeding $100,000, according to Santiment. Both indicators point to a growing demand for Dogecoin among wealthy investors, the so-called “whales”.

Dogecoin’s jump in key metrics reflects investor enthusiasm for Elon Musk‘s October 27 acquisition of Twitter. Elon Musk raises the price of Dogecoin again, Earlier this year, the billionaire businessman flirted with the idea of ​​using Dogecoin as payment to purchase a Twitter Blue subscription.

Musk’s Tesla and SpaceX already accept DOGE payments for their wares.

Shiba Inu meme corners follow DOGE
Shiba Inu, the second largest meme by market capitalization, also showed an increase in the number of copycats.

On October 29 alone, the price of SHIB rose 30% to $0.000001519, the highest level since August 2022. Like Dogecoin, the Shiba Inu rally was part of a larger uptrend that began on the 25 october. Since then, its price has increased by 53%.

Most overbought Dogecoin since April 2021
However, the continued increase in the price of Dogecoin is starting to look exaggerated, according to a classic technical indicator.

The Relative Strength Index (RSI), a momentum indicator that measures the magnitude of recent price movements to analyze overbought or oversold levels, rose to 93.69 on Dogecoin’s daily chart. This is the highest level since April 2021, a month before the price of DOGE hit an all-time high of $0.75.

Therefore, “overbought” conditions do not necessarily imply an immediate bearish reversal. But it reflects the current happy buying moment in the market, which sooner or later causes the price to trend sideways or correct lower.

The 2018-2020 Dogecoin bull market on the weekly chart shows similar price movements. Notably, DOGE has fallen nearly 95% nearly two years after peaking at $0.0194 in January 2018.

The signal’s correction period saw it swing into a descending channel. It broke out in the bullish range in July 2020, but followed the upward movement with a sideways consolidation trend – between the $0.0022 Fibonacci line and the $0.0054 $0.236 Fibonacci line – until in December 2020.

In comparison, the current Dogecoin bear market is shorter but shows a similar trend trajectory for 2018-2020 as shown above. Therefore, DOGE might fluctuate in the current range of the 0-0.236 Fibonacci line (or in the range of $0.055-0.176) after exiting the descending channel.

In other words, DOGE could correct to $0.055 by the end of this year, around 60% below current price levels, if the fractal works out as expected.

Conversely, an immediate break above the Fibonacci line at 0.236 could see DOGE at $0.25 as the next bullish target.

RELATED ARTICLES

Most Popular

Recent Comments