Why is Dogecoin price down today?

Dogecoin (DOGE) is retreating after reaching its highest levels since May 2021, suggesting a growing profit-taking sentiment among traders following Donald Trump’s win.

DOGE price rally overheating

DOGE’s price dropped by 14.25% from its local high of around $0.480, reaching $0.412 on Nov. 25. The top memecoin’s correction coincides with its daily relative strength index (RSI) reading floating above 70—which is considered an “overbought” area—for over two weeks.

The RSI crossing into this territory suggests that DOGE has been experiencing strong bullish momentum, potentially leading to a short-term price pullback as the rally overheats.

The recent RSI top at 77.45 is a lower high compared to its Nov. 13 peak of 92.45. In the same period, Dogecoin has grown by over 22.65%, indicating a growing divergence between DOGE’s price and momentum.

Typically, such a divergence suggests that the bullish momentum behind the price surge may be waning.

So, even though DOGE’s price is climbing, the diminishing RSI strength indicates that fewer buyers are entering the market or that buying pressure is tapering off in the short term.

Bitcoin below $100K limits Dogecoin price upside

Dogecoin’s price drop is part of a broader crypto market decline, led by Bitcoin’s (BTC) pullback after almost hitting the $100,000 milestone.

BTC’s price fell by as much as 4% after hitting $99,800 on Nov. 22. That has sparked crypto market liquidations worth nearly $490 million in the last 24 hours, the highest during a weekend in more than half a year. 

Long and shorts comprised $360.44 million and $128.93 million, respectively, with altcoins accounting for most liquidations.

The Dogecoin futures market witnessed $31.72 million worth of liquidations, with longs amounting to around $21.72 million.

The large liquidations show that many traders were overly optimistic about DOGE’s price, expecting it to continue rising.

When the broader market, including Bitcoin, retreated, these traders were caught off-guard, leading to forced sell-offs that contributed to Dogecoin’s price decline.

DOGE price chasing 30% gains

Dogecoin’s ongoing price correction occurs after testing the upper trendline (~$0.44) of its prevailing ascending triangle as resistance.

Ascending triangle forms when the price trends between a flat resistance level and a rising trendline support, typically signals a potential continuation of the prevailing uptrend if the price successfully breaks above the resistance.

As a technical rule, the potential price target after the breakout is calculated by adding the triangle height (distance between the initial resistance and the first low) to the breakout point.

Related: How high can the Dogecoin price go?

That said, a confirmed daily close above $0.44, accompanied by a significant increase in trading volume, would validate the bullish breakout, setting DOGE’s price on the path toward $0.56 by 2024’s end, up 30% from the current price levels.

Conversely, a pullback from the triangle’s upper trendline could send DOGE’s price down toward the lower trendline target of around $0.40.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Explore new destinations with ease using the Garmin Drive 52 GPS Navigator! With over 17,988 ratings and a solid 4.4/5-star rating, this GPS system has been a top choice for travelers. Over 500+ units were bought in the past month, all for only $144.99.

This 5″ GPS navigator comes with essential driver alerts, real-time travel data, and external memory storage. The simple on-screen menus and bright, easy-to-see maps make it easy to navigate wherever you are. Plus, it’s road trip-ready with The HISTORY Channel database, featuring notable historic sites and much more to enhance your journey.

Don’t miss out—get your hands on the Garmin Drive 52 today for a smoother ride ahead! Buy Now for $144.99 on Amazon!