Is the Overbought Phase Over? Dogecoin's Decline Also Drags Down Shiba Inu and Pepe

▲ Dogecoin (DOGE), Shiba Inu (SHIB), Pepe (PEPE)/ChatGPT generated image ©

As the fervor in the virtual asset market subsides, leading meme coins, spearheaded by Dogecoin (DOGE), are at risk of giving back their previous gains. With weakening buying pressure and a contraction in overall market sentiment, a fierce battle to defend key support levels is anticipated.

According to FXStreet, an investment media outlet, on May 8 (local time), Dogecoin is currently trading around $0.1065 as of Friday, showing a trend that has shifted from neutral to bearish. Continuing its decline for three consecutive days, it is testing the 100-day exponential moving average (EMA) at $0.1063, which acts as a short-term bottom. It is trading significantly below the 200-day EMA, a long-term trend line, at $0.1262, making a breakthrough of the $0.1160 supply zone paramount for a clear rebound.

Shiba Inu (SHIB) is trapped in a sideways trading range, with upward and downward pressures fiercely contesting. It is currently seeking direction between the 50-day exponential moving average (EMA) at $0.00000614 and the 100-day EMA at $0.00000644. The Moving Average Convergence Divergence (MACD) is moving in parallel with the signal line, suggesting a potential bearish crossover, and if the daily closing price falls below the 50-day EMA, there is a risk of it dropping to the March low of $0.00000562.

Based on its early-week rally, Pepe (PEPE) is barely holding the 100-day exponential moving average (EMA) support level at $0.00000403. The Relative Strength Index (RSI) at 64 still indicates active buying pressure, but the decreasing positive bars on the MACD histogram suggest a gradual weakening of upward momentum. Above, $0.00000443 and the 200-day EMA at $0.00000494 form strong resistance barriers.

The technical indicators of major meme coins are collectively warning of a weakening bullish trend. Dogecoin's MACD is on the verge of a death cross, a bearish reversal signal, and Shiba Inu and Pepe also appear poised for further price corrections if not supported by trading volume and buying pressure. Given the nature of meme coins, which are highly sensitive to the movements of major coins like Bitcoin, the overall market's liquidity supply will likely be the key to any future rebound.

Experts diagnose that the current correction is at a critical inflection point, determining whether it is a breather for an overheated market or the beginning of a long-term decline. Investors should exercise caution, closely monitoring whether each coin breaks its key exponential moving average support levels.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*