Why Dogecoin might pullback despite bullish signals

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  • DOGE closed November with a near 170% surge, riding the wave of Bitcoin’s volatility. 
  • If Dogecoin can continue to counter bearish pressures, a similar pattern could unfold.

As a seasoned analyst with years of experience navigating the cryptocurrency markets, I find myself intrigued by the recent performance of Dogecoin [DOGE]. The altcoin has been on quite a rollercoaster ride, and November’s nearly 170% surge has caught my attention.

As an analyst, I’ve observed that my assessment of Dogecoin [DOGE] has shifted towards being “mostly bullish” as it experienced a 2% increase within the last 24 hours. This upward trend is largely due to a substantial 40% rise in newly created addresses, indicating increased interest and investment in the cryptocurrency.

Following a robust week of performance, DOGE reached an all-time high of $0.48 during this electoral period, marking a significant milestone.

As the “Trump trade” lost steam and less experienced traders sold off, DOGE dropped back to $0.40, creating an important level of resistance.

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If the price hits a local minimum point here, it could pave the way for a possible recovery, as investors might shift their funds away from Bitcoin [BTC], allowing it to temporarily rest as the leading coin.

DOGE must capitalize on volatility

In the aftermath of the recent elections, I’ve noticed that Dogecoin (DOGE) has not missed the momentum of the stock market surge. Remarkably, its value increased by more than 170% just within the month of November.

As a researcher immersed in the cryptocurrency landscape, I’ve noticed a significant upsurge in the popularity of altcoins recently, fueling whispers of an impending “altseason.” This trend has me intrigued and eager to delve deeper into the potential implications.

Generally, periods known as ‘altcoin seasons’ arise when the influence of Bitcoin lessens, prompting investors to shift their funds towards well-established altcoins in pursuit of better yields.

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When Bitcoin (BTC) hits perceived high-risk price points, I find myself observing a trend where traders tend to explore alternatives in search of more promising investment opportunities.

As we approach the end of Q4 and Bitcoin remains just shy of the significant $100K mark, I find myself reevaluating my investment strategy. This moment presents an ideal chance for less mainstream coins such as Dogecoin to outperform and potentially yield profitable returns.

Source : TradingView

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During the second week of November, I observed a significant shift in DOGE’s performance as it climbed more than 20% against BTC, surpassing the $0.00000400 threshold. This upward trend was bolstered by a Relative Strength Index (RSI) that spiked above 90, suggesting robust buying activity among investors.

Initially, attention moved away from Bitcoin, but quickly corrected when traders refocused. Within a week of trading, Bitcoin spiked over $99,000 and established a temporary low near $90,000.

Moving forward, if Bitcoin fails to rebound from its current low point, its future trajectory may be largely influenced by major economic events like the forthcoming Federal Reserve meeting, which could potentially ignite a strong upward trend surpassing $100,000.

For now, it looks like the market might take a pause for consolidation. This could lead investors to explore other areas such as altcoins, giving Dogecoin (DOGE) an opportunity to gain more interest and visibility in the market.

But for this to become a reality, Dogecoin needs to sustain its positive trend on crucial indicators to draw the interest of strategic investors.

While the 40% surge in new addresses is a positive sign, it may not be sufficient on its own.

A strong rebound depends on two key conditions

The strong surge in DOGE’s price during November was largely due to a substantial build-up of the cryptocurrency in the open market. On the day it hit $0.40, over 47 million DOGE tokens were taken out of exchanges by traders.

This buildup led to a swift increase in price, as Dogecoin ended up at $0.48 within just six business days.

Source : Coinglass

After Bitcoin peaked at $99K and experienced a 5% decline, the surge in Dogecoin’s value likewise seemed to slow down.

Consequently, Dogecoin fell by 8% over the course of one day, yet its Relative Strength Index (RSI) stayed consistent. This suggests that intense selling pressure wasn’t behind the correction, instead indicating a robust bullish trend.

At the current moment, I find myself analyzing Dogecoin (DOGE) trading at approximately $0.4275. Significant progress can be observed in several key performance indicators, leading me to believe that $0.40 may serve as a temporary support level and potential local bottom formation.

This implies that both individual retail investors and institutional investors are taking action, indicating robust backing for this level of price or value.

In simpler terms, if the current price trend continues, Dogecoin (DOGE) might rise to approximately $0.48 in the near future. But it’s important to note that two significant factors could potentially stop this upward momentum.

Read Dogecoin’s [DOGE] Price Prediction 2024–2025

Initially, if investors return their attention towards Bitcoin following the forthcoming Fed meeting, which is predicted to result in a 0.25% reduction in interest rates, Dogecoin might see temporary profits since funds may flow back into Bitcoin.

If the market price drops below the $0.40 threshold and crucial indicators show signs of negativity, Dogecoin (DOGE) might encounter additional selling pressure. This potential increase in bearishness could hint at a change in investor attitudes.

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2024-12-01 15:04