Dogecoin (DOGE) has experienced impressive growth recently, riding the broader market wave to new highs. According to CoinMarketCap data, the popular meme cryptocurrency rose by 4.93% in the past 24 hours, trading at $0.1729. However, indicators suggest this rally could be short-lived, particularly in the medium and short term.
DOGE’s recent rally has driven it to its highest price since May, achieving a 52-week high with a growth rate of 152%. Over the past week and month, DOGE has seen gains of 24% and 42%, respectively.
Related article: Dogecoin Price Jumps 8%, Outperforming Other Cryptocurrencies
These metrics show strong upward momentum, but some analysts believe DOGE is now overvalued. While the recent growth has excited the market, these highs have raised concerns of an impending price correction.
Trading Volume and RSI Hint at Potential Retracement
Despite the price surge, DOGE’s current trading volume signals a possible cooldown. Its 1-day price chart reflects a Relative Strength Index (RSI) of 76.79, which sits above the oversold level, an indicator often associated with a forthcoming pullback.
Source: CoinMarketCap
Market watchers consider such a retracement as a healthy market adjustment, helping DOGE consolidate and reduce volatility. As the broader crypto market grows, some investors with substantial profits may start selling. This is especially relevant since over 99% of Bitcoin holders are currently in profit. As a result, altcoins like DOGE, which often mirror Bitcoin’s movements, could see a decrease if Bitcoin investors begin profit-taking.
Whales Help Stabilize DOGE Amid Potential Sell-Off
Despite the looming correction, Dogecoin whales remain an essential stabilizing force. These major holders have been actively accumulating DOGE, strengthening its price position and maintaining its dominance against rival meme coins. Unlike Shiba Inu (SHIB), which relies on token burning to manage supply, Dogecoin lacks this deflationary mechanism.
Related article: Dogecoin Breaks Resistance: What’s Behind the 11% Surge?
Instead, whales continue to hold large amounts, reducing potential scarcity and supporting DOGE’s price stability. Dogecoin’s price outlook remains complex. While a retracement seems probable, whale activities could prevent a significant downturn.
The coming weeks will be pivotal in determining DOGE’s price path, as the market watches for signs of profit-taking and whale movements. DOGE’s future remains intriguing, with the potential for continued growth balanced by possible corrections.
