2023-07-28 16:15:00
Dogecoin (DOGE) price has soared 20% since Twitter’s rebranding, but will it be able to sustain its bullish momentum?
In a tweet posted on July 23, Elon Musk announced that Twitter would be changing its name to X. Unsurprisingly, Dogecoin reacted quickly to the announcement, surging 20% in just a few days. Nevertheless, on-chain data reveals that Elon Musk’s ???? coin meme is struggling to maintain its bullish momentum.
Can Dogecoin continue to rise?
The Relative Strength Index (RSI) indicates that Dogecoin might struggle to stay in the green. After hitting a monthly high following Twitter’s ❌ rebranding, Dogecoin’s RSI fell below the critical 70 mark, reaching 61.29 on July 28.
Dogecoin RSI: TradingView
As a reminder, the Relative Strength Index, or RSI, is a momentum indicator that lets you know if an asset is in oversold or overbought territory. When the RSI breaks below the 70 mark, we can expect an increase in selling pressure and an impending correction.
As a result, strategic investors are likely to take bearish positions on DOGE over the next few days.
Sellers outweigh buyers
Likewise, it appears that Dogecoin holders are looking to get rid of their holdings. As IntoTheBlock’s market depth chart shows, sellers have started to create a sell wall.
Indeed, traders have launched orders to sell 193 million DOGE at a price 30% higher than the current price. On the other hand, purchase orders do not exceed 170.93 million DOGE. This means that sellers will have to lower prices in order to be able to liquidate their assets.
Market depth chart: IntoTheBlock
For your information, the market depth chart is a visual representation of the order books of crypto exchanges. It gives us an overall idea about the supply and demand of an asset at different price levels.
As can be seen above, sellers are overwhelmingly outweighing buyers.
Also, with the decline in the RSI, the sell wall may become higher in the coming weeks.
Dogecoin prediction: towards a course of $0.070?
If it fails to maintain its support at $0.075, Dogecoin could enter a long corrective phase. However, as seen below, over 217,000 investors bought 23.8 billion DOGE at an average price of $0.074. As a result, once the price nears this level, these investors may continue to accumulate more coins to help Dogecoin recover.
GIOM indicator: IntoTheBlock
Nevertheless, if the downtrend continues as indicated by the RSI data, Dogecoin could retrace to $0.070
That said, the asset might reverse its downtrend if it manages to break its resistance at $0.080. However, the 143,000 investors who bought 9.14 billion DOGE at an average price of $0.080 may slow down the bearish movement.
Moral of the story: The Doge Army knows what to do to save their token.
Disclaimer
Disclaimer: In accordance with The Trust Project guidelines, this price analysis article is intended for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to providing accurate and unbiased information, but market conditions may change without notice. Always do your own research and consult a professional before making any financial decisions.
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