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Dogecoin (DOGE), the largest meme coin by market capitalization, is currently on an uptrend, riding on the waves of positive broader market sentiment. However, on-chain market analyst Ali Martinez highlighted DOGE technical indicators, which suggest a potential price correction ahead.
What Dogecoin technical indicator is showing
In an X post, Martinez posted a Dogecoin chart showing DOGE trading past the $0.14 level. He noted that the TD Sequential, a crucial indicator for identifying the exact time of potential price reversals, flashes a sell signal on the daily chart.
The TD Sequential flashes a sell signal on the #Dogecoin $DOGE daily chart, anticipating a brief correction before the continuation of the uptrend. pic.twitter.com/nW2yZgnX5h
— Ali (@ali_charts) October 19, 2024
This indicates that DOGE’s current uptrend stems from increased purchases, meaning it might be overbought. This phenomenon typically occurs when demand exceeds supply. Also, a cryptocurrency enters the overbought region when a price surge is without a supporting investment rationale.
A selling period usually follows an overbought condition. Based on this premise, Martinez claimed DOGE will potentially see a brief correction before continuing its ongoing uptrend. As of this writing, the DOGE price was trading at $0.143, up 7.15% in the past 24 hours.
On the weekly chart, DOGE rose over 28%, demonstrating its potential for further price surges.
Dogecoin predictions
Meanwhile, other market analysts have forecast bullish outcomes for DOGE. In a recent U.Today report, pseudonymous crypto trader DonAlt claims DOGE is well-positioned to reach the $1 mark. The trader based his forecast on Dogecoin’s increased social sentiments compared to other market players.
Besides increased social sentiment, Dogecoin recently witnessed a spike in whale activity. Overnight, the cumulative number of large investors holding DOGE equals around $63 million. In just 24 hours, whale inflow exceeded 1.17 billion DOGE, while outflows amounted to 640.1 million DOGE, respectively.
This indicates bullish activity from Dogecoin whales. Because these whales possess a large amount of crypto, such moves are usually followed by notable price movements.