Altcoin Flying by Elon Musk Can Crack 60 Percent!

Dogecoin price increased 150% in 4 days. However, the altcoin is now in the most ‘overbought’ zone since April 2021. According to crypto analyst Yashu Gola, it is therefore possible to drop 60% by the end of the year. The analyst explains why.

Elon Musk has skyrocketed the altcoin price again As you follow, Dogecoin recorded its biggest daily benefit since April 2021. DOGE hit $0.146 on Oct. 29, up about 75%.

DOGE daily price chart / Source: TradingView

Notably, meme-coin’s massive intraday rally came earlier this week as a segment of a broader uptrend that started on October 25. In total, DOGE’s price rose 150% during the October 25-29 price rally.

The increase was accompanied by a strong increase in daily process volumes. According to Santiment, this coincided with an increase in the number of DOGE processes by more than $100,000. Both indicators show a growing demand for Dogecoin tokens amid strong investors or so-called ‘whales’.

Dogecoin whale process count / Source: Santiment

The jump in Dogecoin’s benchmarks reflects investors’ excitement about Elon Musk’s October 27 acquisition of Twitter. Earlier this year, the billionaire entrepreneur flirted with the idea of ​​making Dogecoin a payment method to purchase his Twitter Blue subscription. In the middle, Musk’s Tesla and SpaceX are essentially accepting DOGE payments for their work.

Shiba Inu and chest coins follow DOGE

Another well-known chest coin, the Shiba Inu (SHIB), just had a copycat rally. On October 29 alone, the price of SHIB rose 30% to $0.00001519. This is the highest level since August 2022. Like Dogecoin, Shiba Inu’s rally came as a module of a broader uptrend that began on October 25. Since then, the altcoin price has risen 53%.

SHIB daily price chart / Source: TradingView

Additionally, Dogelon Mars (ELON) rallied 140% during the period in question. Other chest coins have also made huge jumps.

Meme coins performance / Source: CoinMarketCap

Dogecoin tops buys since April 2021

However, according to a classic technical indicator, Dogecoin’s ongoing price rally is starting to look very tense. The relative strength index (RSI), a momentum indicator that determines the degree of recent price changes to analyze the overbought or the oversold levels, has risen to 93.69 on the daily Dogecoin chart. That’s the highest level since April 2021, a month before DOGE hit a record $0.75 high.

DOGE daily price chart / Source: TradingView

Therefore, ‘overbought’ conditions certainly do not imply a quick downside reversal. However, they reflect the current enthusiastic buying momentum in the market. This causes the price to show a horizontal or downward trend sooner or later.

Dogecoin’s 2018-2020 bear market on the weekly chart highlights similar price action. Notably, DOGE has dropped nearly 95% almost two years after hitting $0.0194 in January 2018. The altcoin correction period saw it trending within a descending channel. It came out of the range topside in July 2020. However, until December 2020, the 0 Fib line 0.0022 and the 0.236 Fib line 0.0054 followed the upward move with a horizontal consolidation trend in the middle.

DOGE weekly price chart / Source: TradingView

By comparison, Dogecoin’s ongoing bear market is shorter. However, as in the chart above, it shows a similar trend trajectory for the 2018-2020 period. Therefore, DOGE is likely to fluctuate within the current 0-0.236 Fib line range (or $0.055-0.176 range) following the descending channel breakout.

In other words, if the fractal goes as intended, DOGE is likely to make a true correction to $0.055 by the end of this year, down about 60% from current price levels. On the contrary, if there is a sudden break above the 0.236 Fib line, $0.25 would likely be the next upside target.

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