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Dogecoin (DOGE) is one of the biggest beneficiaries of this week’s broader market rally. Per data from CoinMarketCap, the meme coin is maintaining its uptrend, up by 4.93% in 24 hours to $0.1729. Despite the hype, there are signs this rally might be short-lived in the mid-to-short term.
Dogecoin price reflux soon
Based on its moves in the past week, the DOGE price is trading at its highest level since May. The price has now extended its 52-week high to 152%. As it stands, the DOGE looks overpriced from the current outlook, completed by the 24% and 42% growth rates in the past week and month, respectively.
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Despite this price boom, the current trading volume marks the first sign that a cool-off is ahead. The DOGE 1D price chart also shows a Relative Strength Index (RSI) of 76.79, well above the oversold level.
With this setup, a temporary retracement is considered healthy for the market. In fact, the overall market momentum might see some profit-taking from some investors already in the money. With over 99% of Bitcoin holders now profitable, this profit-taking is likely in the coming days.
If this projection plays out, altcoins like Dogecoin, which have a strong correlation with Bitcoin, may also fall.
DOGE whales to stand guard
When the market is bloated, uncertainties can mount. While the timeline for the likely DOGE retracement remains unknown, Dogecoin whales may help safeguard the coin from an extreme sell-off.
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With a visible uptick in their activities in the past few weeks, these whales have continued to stack massive quantities of the meme coin to help solidify its dominance among its rivals.
With Dogecoin not known for token burning like Shiba Inu (SHIB), these whales remain the last line of defense against fuel scarcity through their HODLing activities. Overall, the DOGE future price action is multi-faceted and will be interesting to watch.