Dogecoin (DOGE) has been on an impressive upward trend over the past month, with its price rising from $0.108 to $0.209.
This sharp rise has brought Dogecoin close to its highest level in 7 months. However, despite this upward momentum, Dogecoin may still struggle to break above key resistance levels.
Surge in Investors Profiting from DOGE...Possibility of Weakness Looms
According to market sentiment analysis through the profitability of active addresses, around 40% of current Dogecoin participants are in profit. Historically, when a significant portion of network participants hold profitable positions, they are more likely to sell. This tendency to realize gains can exert downward pressure on Dogecoin's price, and when the ratio of profitable holders exceeds the 25% threshold, it is generally considered a bearish indicator.
The high level of profitable addresses requires caution from investors seeking additional gains. If a substantial number of holders choose to cash out, it could add selling pressure that disrupts Dogecoin's upward trajectory and hinders the achievement of the next price milestone.
Dogecoin's macroeconomic momentum is reflected in its Relative Strength Index (RSI), and this asset has been lingering in the overbought territory above 70.0. This indicates strong buying interest, but prolonged stays in the overbought zone can sometimes trigger corrections. While there is no immediate threat of a reversal, Dogecoin's RSI levels suggest the need for caution.
In the past, Dogecoin has maintained overbought levels without an immediate decline. However, the possibility of a correction remains if buying interest weakens or sellers start to capitalize on recent gains.
Dogecoin Price Prediction: Wait and See the Support Level
Dogecoin's price has risen 8.5% in the last 24 hours, trading at $0.209. If Dogecoin can break above the crucial $0.220 resistance level, it would mark a new all-time high in 7 months, solidifying its strong position in the cryptocurrency market. Surpassing this level would indicate a strengthened upward trend.
However, considering the potential bearish signals from profit-taking and the high RSI levels, Dogecoin may struggle to maintain its recent gains. Failing to break above $0.220 could cause Dogecoin to lose the $0.200 support level, potentially leading to a pullback to $0.176. Such a loss of support could make the market sentiment more cautious.
If Dogecoin can maintain its current upward momentum, it could break through the $0.220 resistance and open the path to a rise towards $0.300. This move would invalidate all bearish outlooks and allow Dogecoin to capitalize on its current uptrend to generate additional gains.
