The Dogecoin Rally May Be Coming To An End: Should We Sell Now?

Dogecoin, the iconic meme currency, has experienced a meteoric rise this week, capturing the attention of crypto investors from all walks of life. However, this ascent may very well hit a ceiling. While some are pondering a sell-off, others believe that caution is warranted before making a decision. Market indicators signal a possible slowdown, but in the volatile world of crypto, anything can change.

Dogecoin: a craze that could fizzle out

The recent Dogecoin rally should not obscure the possibility of a trend reversal. Although it peaked at $0.1729, up nearly 5% in 24 hours, this progress largely hinges on a widespread enthusiasm for the crypto market.

However, the chart of DOGE prices in daily data (1D) indicates a relative strength index (RSI) of 76.79, a level that signals an overbought zone.

In simple terms, this value could suggest that Dogecoin is currently trading above its reasonable level, paving the way for a potential correction.

Moreover, a declining trading volume could further accentuate this trend. This type of cooling, often seen as healthy for stabilizing the market, can also alert investors to a possible fizzling out.

DOGE holders, having enjoyed quick gains, are now considering taking profits. With a market dominated by a strong correlation with Bitcoin, any drop from the giant could pull Dogecoin down with it, highlighting the need for vigilance.

DOGE whales: a protection against mass selling?

The “whales”, these investors holding significant amounts of Dogecoin, play a key role in stabilizing the cryptocurrency during times of high volatility.

Their recent activity reveals a strategy of massive accumulation, aimed at strengthening Dogecoin in a booming market.

Unlike projects like Shiba Inu, Dogecoin does not incorporate a burning mechanism, meaning that available reserves remain constant. By relentlessly accumulating, the whales create a barrier against a sudden drop in supply on the market.

However, their presence, while stabilizing, does not guarantee total protection against fluctuations. Indeed, even the most fervent Dogecoin supporters know that whales can succumb to the temptation to sell during periods of high volatility.

These players also monitor broader market trends and react to global signals, such as Bitcoin movements and forecasts for growth in the crypto market.