Dogecoin Faces Resistance As Bullish Momentum Slows: What Traders Should Know
- Dogecoin has experienced a significant price increase, with the 50-day SMA rising, signaling potential opportunities for new buyers.
- Despite being overbought territory, 80% of Dogecoin holders remain profitable, indicating strong demand at lower prices.
- Large DOGE inflows outpaced outflows recently, helping the coin maintain gains despite increasing selling pressure.
Dogecoin (DOGE) has attracted market attention recently due to its impressive bullish trend and movement in the market. In an X post on Wednesday, Crypto Daily Trade Signals, highlighted that the 50-day Simple Moving Average (SMA) is increasing which means there are opportunities for new buyers.
In the last two weeks alone, Dogecoin has seen what might be among the best runs in the last couple of months. DOGE is now trading at $0.1367, which is 27.91 higher than when it hit its October lows. Although Dogecoin has lately recovered, the coin is currently facing resistance at the $0.141 level, a level that has often proven difficult for the bulls to break.
Positive Dogecoin Sentiment
In the past, this price range has been problematic and current market data indicates that DOGEs Relative Strength Index (RSI) is now in the overbought zone. The money flow index (MFI), also shows a weak downward movement which indicates that some traders may begin taking profit.
Source: TradingView
Still, the overall sentiment of Dogecoin holders is still mostly positive, despite the increasing amount of resistance. Analytical platfrom IntoTheBlock suggests that 80% of addresses are in green, 16% in red, which speaks for itself stating demand at lower price tags. This has helped proffer resistance to the DOGE price as some traders are a little bit more careful with their trades.
Furthermore, important large shareholders` activity has been identified in the last several days. Deposits to addresses holding 100 or more Dogecoins went up from 274.5 million to 1.08 billion DOGE between October 20 and 21. While large outflows have also risen, total inflows remain higher, which is why the price has managed to stick to recent gains when there is more selling pressure.
Source: IntoTheBlock
DOGE Outflows Surge
Data from the exchange indicate that outflow volumes reached a high of 422.56 million DOGE on October 21st, while inflows were only 371.71 million DOGE. Since Dogecoin is close to recent price highs, traders are waiting for a signal of whether the price growth will continue or investors will take their profits and cause a price dip shortly.
Source: IntoTheBlock
Although Dogecoin has quite strong bullish, various signals from market indicators and increasing resistance levels indicate that the situation should be approached with caution. The RSI and MFI indicators are showing signs of a potential cool down period, while large holders are neutral with their balance between buying and selling. The next few days will be pivotal for Dogecoin to either continue its upward momentum or for a short term retrace.
Read more: https://www.tronweekly.com/dogecoin-faces-resistance-as-bullish-momentum/
Text source: TronWeekly
