After reaching a recent peak of $0.48, Dogecoin [DOGE] has encountered challenges in sustaining an upward trajectory. The meme-inspired cryptocurrency has been moving within a narrow range of $0.42 to $0.37 in recent times.
Presently, DOGE is trading at $0.3832, indicating a 4.11% decrease in its daily value.
The recent downturn following a period of consistent growth suggests a potential change in market dynamics. Notably, well-known crypto analyst Ali Martinez views the current market conditions as bearish.
Shift in Dogecoin’s Market Sentiment towards Bearish Trends
Martinez’s analysis suggests that market sentiment towards Dogecoin has taken a pessimistic turn. Traders seem to have lost patience with the ongoing price consolidation.
A switch from bullish to bearish sentiment signifies a sense of exhaustion among buyers, with sellers now taking the lead in the market.
When sellers dominate, it usually leads to increased selling pressure and surplus supply, ultimately causing prices to decline.
This dominance of sellers is evident from the decline in DOGE’s RSI over the last ten days, indicating that many investors are selling off to lock in profits and prevent further losses.
Furthermore, Coinglass reports that short sellers are prevailing with 54% on 24-hour charts and 64% on 4-hour charts, indicating a prevailing sentiment of price drops among investors.
Evaluating DOGE Charts for Insights
The current market sentiment hints at the possibility of further declines for DOGE, given the exhaustion of upward momentum.
An indication of this exhaustion and the reinforcement of the downtrend is seen in the declining +DI. The consistent decrease in the positive index implies a loss of upward momentum in the market while strengthening the downward trend.
Additionally, Dogecoin’s Price DAA divergence has remained negative throughout the past week, suggesting a general aversion from investors towards the asset.
With the shift in market sentiment surrounding Dogecoin, the cryptocurrency may face additional losses on its price charts. If the current conditions persist, DOGE could potentially drop to $0.367.
However, if this decline presents a buying opportunity and investors re-engage, DOGE might stage a recovery and challenge the $0.40 resistance level.