Dogecoin Aims For New Yearly High Amidst Price Correction Speculation

The world's first meme coin, Dogecoin (DOGE), could be poised for a new yearly high as it rallied over the past three days leading up to October 29. On Tuesday, the digital asset surged 8%, which set the stage for a potential breakout.

As of October 29, DOGE has been striving to maintain a move above the $0.1756 resistance level. This pushed Dogecoin into a rectangular channel after a brief surge of 15% over a few hours. However, persistent selling pressure caused the token to retreat and reject this level.

The meme coin has gained 33% since Saturday, October 26, when it bounced off the 100-day Simple Moving Average (SMA). As Dogecoin's buying momentum continues, the token has the potential to surpass its yearly high of $0.2288. However, before reaching that milestone, DOGE must reclaim and hold above the $0.1756 level.

There is a heightened risk of a price correction for Dogecoin, as indicated by the token's Relative Strength Index (RSI), which currently resides in the overbought zone.

According to data from reputable crypto metrics platforms, the chances of a price correction are high as over 92% of the token's supply is currently being held in profit. This may prompt crypto investors to partially cash in their profits, which could lead to increased selling pressure on Dogecoin holders.

The meme coin's Market Value to Realized Value (MVRV) Ratio is currently at 77%, its highest point in five months. The MVRV is a key indicator of selling pressure, as it calculates the average profit of all holders based on the price at which each token last moved. A high MVRV suggests that DOGE token holders have gained 81% on their initial investment, implying a potential price correction.

As Dogecoin's MVRV approaches levels witnessed during the previous meme coin season, crypto traders anticipate a resurgence of the meme coin craze, similar to the one seen in May.

In fact, the entire meme coin sector has experienced a surge of 11%, with tokens such as Dogwifhat (WIF), PEPE, and Shiba Inu (SHIB) witnessing significant gains.

As of October 30, Dogecoin trades at $0.1684, down 3.21% over the past 24 hours, while its trading volume has dropped by 33% to $2.75 billion. Currently, the digital asset has a market capitalization of $24.69 billion, representing a 3.42% decline.