- Dogecoin retreats 14% from a five-month high, with traders taking profits post-Trump win
- RSI indicates potential pullback as momentum diverges from DOGE’s recent price surge
- Price volatility remains high in Dogecoin’s futures market, sparking indecisiveness among traders
Dogecoin’s recent rally appears to be losing momentum as the cryptocurrency drops from its five-month high, reflecting an increase in profit-taking among traders following Donald Trump’s presidential victory. The price of DOGE fell by about 14%, from its November 7 peak of $0.218 to $0.188, after the daily relative strength index (RSI) signaled an “overbought” condition.
Source: TradingView
RSI and Divergence Indicate Overheating Market
The RSI recently crossed above 70, which generally signals an overbought level and suggests a potential cooldown in price action. The latest RSI reading of 74.91 is lower than its October peak of 79.57, indicating that momentum may be waning. While Dogecoin gained over 22% during this period, the weaker RSI suggests that buying enthusiasm may be tapering off.
This divergence between price and momentum highlights a likely slowdown, as fewer buyers seem to be entering the market or the bullish pressure is starting to ease. Analysts observe that this trend might point to a short-term pullback.
Volatility and Market Indecisiveness
Dogecoin’s price drop also reflects heightened uncertainty in its futures market. Since Trump’s win on November 6, Dogecoin has seen approximately $63.83 million in liquidations, almost evenly split between long and short positions. This balance signals a volatile environment where both bullish and bearish traders are facing challenges.
Such volatility might encourage quick profit-taking, as traders respond to rapid price shifts. This environment suggests that Dogecoin could see more fluctuation, with traders likely adapting based on their risk tolerance.
Critical Resistance Level Could Signal Correction
Dogecoin’s latest price movement also touches on a historically significant resistance zone that has acted as a ceiling since November 2021. This resistance area has previously triggered corrections ranging from 60% to 80% whenever DOGE has reached this threshold.
If Dogecoin fails to break above this resistance, analysts warn that a similar correction could follow, potentially targeting the 50-week exponential moving average around $0.120 in the upcoming months. Conversely, a clear breakout past this level—bolstered by pro-crypto sentiment linked to Trump’s victory and Elon Musk’s Department of Government Efficiency—could push Dogecoin toward the previous high of $0.221 in 2025.
