The original meme coin, Dogecoin (DOGE) is continuing its bullish trend which started when Donald Trump won the US election last week, by rising to $0.41600 yesterday. This has put the meme coin in above the overbought level of 70 which might lead to a pullback.
This comes at a time when Donald Trump revealed that Elon Musk and Vivek Ramaswamy will lead the Department of Government Efficiency (D.O.G.E.)
DOGE has been on a bullish run as it rallied to go beyond the upper Bollinger Band which showcased a strong buying pressure for the token. This is happening while the sentiment of overbought is there.
The Relative Strength Index (RSI) of Dogecoin rose to 91.44, a point which lies higher than the overbought level. This indicates that DOGE is likely to undergo price correction soon.
The meme coin is likely to face some resistance as signalled by the upper Bollinger band which often suggests an overbought zone. However, this is usually followed by a consolidation period before the token surges again.
Dogecoin is likely to experience a pullback to $0.20385 in the middle Bollinger Band, which will let the price consolidate before DOGE spikes again.
The meme coin has an immediate resistance level at the current trading level at $0.41600. This might result in a bearish trend due to selling pressure in case DOGE doesn't rise to higher levels.
The digital asset’s support levels lie at $0.35737 and $0.20385 which are near the current price and the middle Bollinger Band respectively. Crypto traders are watching these zones in case Dogecoin suffers a pullback.
However, DOGE has formed a bull flag pattern at a short-term scale which would cause the price to rally to higher points. This pattern has an upward surge along with sideways correction within a falling pattern before the final surge. Structures like these point to crypto buyers positioning themselves for an upward movement in case of a consolidation zone breach.
At this point, DOGE holders should concentrate on the $0.35 as it would confirm the bull flag pattern. If the meme coin persists above this level it would mean a sustained buying interest for the token.
However, if Dogecoin goes below this level it will invalidate the bull flag pattern and tarnish the bullish outlook. Analysts predict that the meme coin will reach $0.56, a 45% gain from the current level if it breaks above the bull flag pattern.
This target will materialise if the bill flag pattern plays out well based on the initial height of the rally. Crypto traders have been advised to keep an eye out for a breakout above the flag’s upper trendline. This will confirm that the meme coin is continuing its upward trend
At the time of writing, DOGE was trading at $0.3999, up 4.34% in the last 24 hours while trading volume has declined 39.46% to touch $22.25 billion and the market cap stood at $58.61 billion, up 4.12%.