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After staging a massive rally, Dogecoin price is currently going through a consolidation phase. This is also reflected in technical indicators. Cryptocurrency analyst Kevin (@Kev_Capital_TA) warns of a potential sell signal. In his latest work to update On Day
Dogecoin price analysis
Kevin highlighted that Dogecoin “prints a sell signal on the weekly timeframe with the appearance of the red dot,” warning that this signal requires confirmation within the next week to enhance its validity. He identified a convergence of three strong technical indicators, including the Moving Average Convergence Decline (MACD) and the Stochastic Relative Strength Index (Stoch RSI) that has “peaked awaiting a bearish crossover.”
Together, these indicators suggest that a potential downtrend may be imminent. However, Kevin balanced this out by noting that “price action still looks bullish and money flow is also bullish,” suggesting that these factors currently outweigh the bearish signals.
Despite the long-term sell signals, Kevin remains open to the possibility of continued bullish momentum in the short term. He noted that Dogecoin had “closed(d) the highest monthly close of the candle body ever,” marking a major milestone while acknowledging that “downside remains a risk.”
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Looking ahead, Kevin noted the importance of the key resistance level, saying, “Until we break 0.60 US cents cleanly, there’s nothing really to get excited about,” referring to his weekly chart of Fibonacci price levels extending to $1.
Furthermore, Kevin looks closely at macroeconomic factors that can impact Dogecoin’s performance. He noted that “altcoin season” could serve as a catalyst for continued DOGE strength, provided Bitcoin’s dominance falls below the 55% level. “If BTC dominance breaks the 55% level cleanly, you will get your #ALTSEASON,” he explained.
Additionally, Kevin shared his strategy regarding long-term moving averages, saying: “When these two long-term moving averages cross on Dogecoin, I will sell a big piece of my portfolio. They have successfully called the top on DOGE multiple times. They are moving fast!”
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Notably, the cryptocurrency analyst points to the Pi Cycle Top Indicator for Dogecoin, a tool traditionally used for Bitcoin (BTC). This indicator is based on the intersection of two moving averages – 111 days and 350 days multiplied by two – to indicate potential market tops.
Last week, Kevin revealed: “One of my secret indicators for Dogecoin that is traditionally only supposed to work with BTC is the Pi Cycle Tops indicator. I precisely call each cycle a DOGE at the top and bottom of each of its cycles. When the two moving averages cross If the monthly RSI is at a certain level, then I plan to exit large portions of the market.”
At press time, DOGE was trading at $0.41.
Featured image created with DALL.E, a chart from TradingView.com