Dogecoin (DOGE) is experiencing a death cross scenario that could trigger a price reversal for the top meme coin. If confirmed, such a development would undo the gains made by DOGE bulls recently, as prices will likely crash below critical support levels.
Dogecoin’s RSI signals room for recovery
According to data, Dogecoin's nine-day, or short-term, moving average is on the verge of crossing below the long-term 21-day moving average on the daily chart, signaling a death cross. This signals a potential bearish scenario for investors and traders alike.
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However, the Dogecoin Relative Strength Index (RSI) is currently at 57, which offers hope for investors as it is just seven points away from the neutral line. This implies that the market is far from overheated and suggests that more upward momentum is likely.
DOGE will likely experience a switch if bulls act early enough to reverse the trend. Notably, if investors increase their activity and create buy pressure on DOGE, this could invalidate the death cross and prevent a significant price dip.
As of press time, Dogecoin wastrading at $0.2285, representing a 0.7% increase in the last 24 hours. However, the trading volume remains in the red zone at $1.17 billion, representing an 11.26% decline within this time frame.
This suggests that the drop in volume could have catalyzed the activation of the death cross, and a spike in transaction volume could reverse the trend.
Could Bitcoin correlation save the day for DOGE?
As U.Today reported, despite the death cross scare, Dogecoin staged a rebound as buyers stepped in at key support levels to prevent an extended drop. The meme coin managed to rebound, along with other assets on the market.
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Meanwhile, in the broader crypto space, Bitcoin is consolidating just below $110,000, anticipating a possible breakout soon.
With Dogecoin aligning with Bitcoin, DOGE could recover and mirror Bitcoin’s price movement. If this happens, a short-term rally is possible for the meme coin king.
