After a spectacular rally, Dogecoin (DOGE) is currently in a consolidation phase. Crypto analyst Kevin (@Kev_Capital_TA) warns that technical indicators point to a possible sell signal. At the same time, the short term remains bullish, making the situation complex for traders.
Technical analysis Dogecoin
According to Kevin, the weekly DOGE/USDT chart shows a sell signal with a red dot on the chart. This signal, which needs confirmation in the coming week, is supported by three strong indicators:
- A declining Moving Average Convergence Divergence (MACD).
- A Stochastic Relative Strength Index (Stoch RSI) that is “waiting for a bear cross at its top.”
While these indicators point to downward movement, Kevin emphasizes that the short-term price action and money flows remain bullish. He points to Dogecoin’s highest-ever monthly candle close as a significant positive, though he warns that “downside risks remain.”
Important levels and altseason as a catalyst
Kevin emphasizes that a break above $0.60 is crucial to generate new bullish momentum. Until then, traders remain cautious, especially with Fibonacci price levels reaching as high as $1 as a potential price target.
The analyst also points to broader market dynamics, such as Bitcoin’s dominance. He states that a drop in BTC dominance below 55% could lead to an altseason, potentially providing the next boost to Dogecoin.
Long term strategy: Pi Cycle Top Indicator
Kevin shares his long-term strategy using the Pi Cycle Top Indicator. This indicator, originally developed for Bitcoin, has successfully predicted Dogecoin’s peaks and bottoms in previous cycles, according to him. The indicator is based on crossing the 111-day and a modified 350-day moving average.
Kevin states: “When these averages cross and the monthly RSI reaches a certain level, I take a large portion of my position out of the market.” This strategy provides a framework for traders who focus on maximizing profits while minimizing risk.
Current status and prospects
At the time of writing, Dogecoin is trading around $0.41. While the longer-term sell signal is a warning, the short-term bullish signals remain intact. Traders should therefore keep a close eye on crucial levels and market dynamics in the coming days.
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Source: https://newsbit.nl/dogecoin-rally-voorbij-analist-waarschuwt-voor-verkoopsignaal/
