Dogecoin was one of the best performing crypto assets following a recent rally in the general market over the past few weeks. However, considering several indicators and current price action, a correction could be coming for the largest meme coin.
Bearish price signal emerges for Dogecoin
Dogecoin’s new upward price trend could be about to experience a setback, as market expert and investor Dima James Potts said. predicted that DOGE could be heading for a short-term correction. His prediction comes as market dynamics continue to change following the meme coin’s recent rally, which sparked uncertainty among investors and traders.
The analysis of market experts is reinforced by historical price trends, especially during the last cycle, which triggered a notable decline for Dogecoin in the midst of its uptrend, suggesting a similar scenario in the ongoing market cycle. As speculation about profit-taking increases significantly, these predictions raise concerns about the stability of the current price of the same coins. upward momentum.
According to the analyst, during the previous market cycle, Dogecoin saw a sharp decline of around 56% after reaching the 78.6% Fibonacci level. Meanwhile, the coin hit the 78.6% Fibonacci level again this week, implying that the same price correction could be on the horizon before resuming its bullish force towards higher levels in the current cycle.
Although a substantial pullback could be imminent, James Potts emphasized that his prediction does not suggest a sell signal, but rather a simple comparison of past cycle price movements with this current cycle. “As I mentioned in my previous articles, expect significant setbacks on the path to the top,” he added.
It is worth noting that the expert expects a market top for Dogecoin at the psychological price of $10. James Potts has consistently highlighted DOGE’s journey to this level in several articles, which he hopes to launch in 2025.
Considering DOGE’s past performance outpacing each cycle, as evidenced by a 9,000% increase in 2017 and an 18,000% spike in 2021, the expert is confident that DOGE could see a much bigger rally this time around if the trend persists.
Can DOGE’s upward momentum hold?
Earlier today, Dogecoin saw a decline to the $0.37 level after a notable price rally over the weekend. However, the meme coin appears to be slowly regaining its bullish momentum as DOGE rebounded to $0.4366, indicating a 1% increase in the last 24 hours.
The brief pullback could be attributed to waning optimism and trader interest in DOGE. Data from CoinMarketCap shows that its trading volume has turned negative, falling more than 28% over the past day, suggesting that investors could get rid of the asset to obtain gains. If investors go on a selling spree, Dogecoin could see a decline in the following days.
Featured image from Unsplash, chart from Tradingview.com