Since hitting a recent high of $0.48, Dogecoin [DOGE] has struggled to maintain an upward momentum. The memecoin has traded in a consolidation range between $0.42 and $0.37 since.
In fact, as of this writing, DOGE was trading at $0.3832. This marked a 4.11% decline on daily charts.
The recent decline after a sustained uptrend signals a potential shift in market dynamics. Inasmuch, popular crypto analyst Ali Martinez sees the current market conditions as a bearish signal.
Dogecoin’s market sentiment turns bearish
In his analysis, Martinez posited that Dogecoin’s market sentiment has turned negative. According to him, it seems traders have become impatient with the current price consolidation.
A shift in market sentiment from bullish to bearish reflects exhaustion among buyers with sellers dominating the market.
Often, when sellers dominate, it results in high selling pressure and oversupply, thus pushing prices down.
This dominance among sellers was evidenced by the fact that DOGE’s RSI has dropped over the past 10 days. This suggests that most investors are selling to capitalize on recent gains and avoid more losses.
Separately, according to Coinglass, short sellers are dominating with 54% on 24-hour timeframes and 64% on 4-hour time frames. This implies that most investors are betting on the prices to decline further.
What DOGE charts suggest
As observed above, the current market sentiment suggests DOGE could see further drops as upward momentum has exhausted.
For starters, we can see this exhaustion and strengthening of the downtrend with the decline in +DI. With the positive index experiencing a sustained decline, it suggests that the market’s upward momentum is lost while the downtrend is strengthening.
Additionally, Dogecoin’s Price DAA divergence has remained negative over the past week. This implies that most investors are avoiding the asset.
With Dogecoin seeing a shift in market sentiment, the memecoin could see more losses on its price charts. Therefore, if these conditions hold, DOGE could drop to $0.367.
However, if this dip creates a buying opportunity and buyers reenter, the memecoin could recover and reclaim the $0.40 resistance level.
