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Dogecoin (DOGE) Analysis: Will This Sell Signal Cause a 26% Price Decline?

2 mins
Updated by Ryan James
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In Brief

  • Dogecoin price noted a 42% rally this past week, nearly breaching the $0.182 barrier, bringing it closer to $0.20.
  • Investors are optimistic of further rally as Open Interest has surged by $600 million in a week.
  • At the same time, threat looms over DOGE as price DAA is exhibiting the first sell signal of 2024.
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Dogecoin (DOGE) price left meme coin enthusiasts rather elated in these seven days as the altcoin completed a 42% rally.

But with the rise comes the potential for correction, and for the first time in 2024, the DOGE sell signal is at its strongest.

Dogecoin Holders Still Betting on a Rise

As the Dogecoin price made its way up on the chart, it left behind a rally huge enough to recover the losses witnessed by investors during mid-March. The 42% increase covered up the 26% crash, bringing DOGE closer to reaching $0.20.

This instilled confidence among DOGE holders, who seem to be extremely bullish towards the coin. The same is evinced by the Open Interest, which refers to the total number of outstanding derivative contracts. These open contracts witnessed a 66% surge of $600 million as the altcoin consists mostly of long positions – hinting at a potential increase in price.

Dogecoin Open Interest.
Dogecoin Open Interest. Source: Coinglass

Read More: How To Buy Dogecoin (DOGE) With eToro: A Complete Guide

Secondly, technical indicators paint a bullish picture, too. The Relative Strength Index (RSI), which measures the speed and change of price movements, is in the bullish neutral zone. Furthermore, the Moving Average Convergence Divergence (MACD), a trend-following momentum indicator, also notes a bullish crossover.

Dogecoin RSI and MACD.
Dogecoin RSI and MACD. Source: TradingView

These indicators hint at further growth in Dogecoin price.

DOGE Price Prediction: Sell Signal Suggests Drop

Dogecoin price, by and large, seems to be suggesting an increase in price is likely. If DOGE continues on this path and manages to flip the $0.182 resistance into support, it will be able to chart a rise to $0.20, marking a two-year high.

DOGE/USDT 1-day chart.
DOGE/USDT 1-day chart. Source: TradingView

However, price daily average addresses (DAA) divergence is signaling a sell signal. This metric compares changes in the price of an asset with the number of new addresses interacting with it. This indicates potential discrepancies between price movement and user adoption or network activity.

Dogecoin Price DAA Divergence.
Dogecoin Price DAA Divergence. Source: Santiment

Read More: Dogecoin (DOGE) vs Shiba Inu (SHIB): What’s the Difference?

In the past, whenever this metric triggered a sell signal, the Dogecoin price witnessed a correction. Considering this is the first this year and a rather major one, DOGE could correct significantly. The meme coin could drop through $0.164 and tag $0.151, which would invalidate the bullish thesis and cause a 26% decline to $0.135.

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In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

Aaryamann Shrivastava
As a Mass Media (Journalism) graduate, my journey into cryptocurrency journalism has evolved into a distinguished role as an On-Chain Analyst over the past two and a half years. Collaborating with industry-leading media companies like FXStreet, AMBCrypto, and FXEmpire, I’ve delved deeply into the intricate realms of Crypto and Blockchain, crafting over 2,500 meticulously curated SEO-focused articles. Driven by a commitment to excellence, I remain steadfast in delivering the highest caliber...