Recently, Dogecoin emerged as a top-performing cryptocurrency amidst a broader market rally. However, indicators suggest that this largest meme coin may soon face a price correction.
Dogecoin Faces Bearish Signals
As Dogecoin enjoys a price upswing, market expert Dima James Potts forecasts that it might be due for a short-term decline. His observations follow a recent surge in the meme coin’s value, inciting uncertainty among traders and investors as market dynamics shift.
Potts’ analysis draws from historical price movements, notably referencing a significant pullback during Dogecoin’s previous bull run. This leads to concerns about the sustainability of its current upward trend, particularly as profit-taking strategies become more prevalent.
In previous cycles, Dogecoin experienced a sharp drop of approximately 56% after hitting the 78.6% Fibonacci level. Currently, it has once again reached this critical level, hinting that a similar corrective phase might occur before it gains upward traction again.
While Potts acknowledges the likelihood of a significant pullback, he clarifies that this does not equate to a sell signal. He advises traders to anticipate substantial price fluctuations on the path upwards. He also projects a potential market peak for Dogecoin at the psychological price point of $10, which he believes will materialize around 2025.
Reflecting on DOGE’s historical performance—such as a remarkable 9,000% increase in 2017 and an astounding 18,000% rise in 2021—Potts expresses confidence in the possibility of an even larger rally, should the current trends continue.
Will DOGE Sustain Its Momentum?
Today, Dogecoin witnessed a decline to $0.37 following a weekend price increase. Nonetheless, it seems to be gradually recovering, with a slight rise to $0.4366, marking a 1% gain over the last 24 hours.
This temporary dip might stem from diminished optimism among traders. Recent data from CoinMarketCap indicates a more than 28% drop in trading volume, suggesting that investors could be offloading the asset to lock in profits. If this trend continues, Dogecoin may face additional declines in the coming days.
