Retracement Could Be in the Cards for Dogecoin: Here’s Why

Sahana Kiran
Source – Unsplash

The last couple of days have been exceptional for the Dogecoin [DOGE] ecosystem. Elon Musk the self-proclaimed “Dogefather” outdid himself in terms of endorsing the meme coin. Musk and his decision to change the Twitter logo came as a surprise to many, however, it benefited DOGE in several ways. The price, popularity, and network activity of Dogecoin witnessed a major surge. But this did not last very long.

At press time, the largest meme coin was dipping by 1.04% while the rest of the market was rising over the last 24 hours. Nevertheless, the asset’s weekly gains were at a high of 29.49%. DOGE was trading for $0.09835. Looks like more retracement could follow suit.

Prominent crypto analyst, Ali Martinez took to Twitter and highlighted historic patterns as well as corrections in the DOGE network. For instance, DOGE has reportedly witnessed corrections in its price right after its daily social media mentions exceed 13,000. Following Musk’s latest endorsement, Dogecoin’s social volume surged to 15,000. This further instilled the possibility of a correction.

Will DOGE witness a dip before rising?

Even though the meme coin is currently enduring a fall, buyers were still in its market. However, it could consolidate for a while before entering its next phase.

Source – DOGE/USDT Chart on TradingView

The MACD indicator used in the four-hour chart of Dogecoin exhibited a bullish notion. But the MACD line was seen slowly trying to get below the signal line indicating a possibility of a bearish crossover. The Relative Strength Index [RSI] indicator noted extensive buying in the market. The RSI maker was way over the 50 median close to the overbought zone.

Furthermore, Dogecoin’s recent dip pushed the profitability of holders from 67% to 66%. If any more corrections or retracements are to occur, profitable holders might look to sell and increase downward pressure on the market.