Dogecoin’s recent bullish surge has prompted a heated debate among investors. With a remarkable 41.95% increase in October, Dogecoin reached a price of $0.145. However, the cryptocurrency is now entering overbought territory, sparking questions about whether a retracement is on the horizon. Traders are assessing whether to take short-term profits or continue holding for potential further gains.

Resistance at Key Levels

Investors have noticed that Dogecoin bulls are now struggling to maintain momentum. Historically, resistance has been strong around the $0.141 price range. Despite pushing above this level, Dogecoin has faced difficulty sustaining upward movement. In the past three days, momentum has noticeably weakened, suggesting that the bullish run might be cooling down.

Indicators Suggest Cooling Momentum

Two key indicators, the Relative Strength Index (RSI) and the Money Flow Index (MFI), reflect weakening momentum. The RSI has entered overbought territory, signaling the potential for a slowdown. At the same time, the MFI has dipped slightly after reaching overbought levels, hinting at initial profit-taking among traders. These signals suggest that some market participants are cashing in on recent gains.

Majority of Holders in Profit

Despite the signs of a cooldown, many Dogecoin holders remain optimistic. On-chain data from IntoTheBlock shows that 80% of Dogecoin holders are currently in profit. Only 16% are out of the money, indicating strong demand near the lower price ranges. This ongoing demand could help Dogecoin maintain its recent gains, at least in the short term.

Whale Activity Shows Mixed Sentiment

Whale activity has been a significant factor in Dogecoin’s price action. On October 21, large holders increased their inflows to 1.08 billion DOGE. However, large holder outflows also surged to 392.2 million DOGE, reflecting a rise in selling pressure. This mixed sentiment among whales highlights the uncertainty of the current rally.

Exchange Flows Add to the Uncertainty

Exchange flow data offers further insight into Dogecoin’s outlook. On October 21, exchange outflows peaked at 422.56 million DOGE, while inflows reached 371.71 million DOGE. This trend suggests that more traders are removing Dogecoin from exchanges than depositing, which could signal confidence in future price gains.

Read Also: Dogecoin Breaks Resistance: What’s Behind the 11% Surge?

Ultimately, while the rally remains strong, profit-taking could increase, potentially leading to a retracement in the coming days.