Is the Overbought Period Over? Dogecoin's Decline Drags Shiba Inu and Pepe Down Too

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

As the heat in the virtual asset market cools down, leading meme coins, spearheaded by Dogecoin (DOGE), are facing the risk of giving back their previous gains. With weakening buying sentiment and a general contraction in market sentiment, a fierce battle is expected to defend key support levels.

According to investment media FXStreet on May 8 (local time), Dogecoin is currently trading around $0.1065, showing a neutral to bearish trend. 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 significantly below the 200-day EMA, a long-term trend line, at $0.1262, making a breakthrough of the $0.1160 supply zone imperative for a clear rebound.

Shiba Inu (SHIB) is trapped in a sideways range with strong upward and downward pressures. It is currently seeking direction between the 50-day 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, hinting at a potential bearish crossover. 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.

Pepe (PEPE) is barely holding onto the 100-day EMA support level at $0.00000403, building on its early week gains. The Relative Strength Index (RSI) is at 64, indicating that buying momentum is still alive, but the positive bars on the MACD histogram are shrinking, suggesting a gradual slowdown in upward momentum. Above, $0.00000443 and the 200-day EMA at $0.00000494 form strong resistance barriers.

Technical indicators for major meme coins are commonly 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 to face inevitable further price corrections if not supported by trading volume and buying pressure. Given the nature of meme coins, which are sensitive to the trends of large coins like Bitcoin, the overall market's liquidity supply will be key to any future rebound.

Experts diagnose that the current correction is at a critical turning point to determine whether it is a breather for an overheated market or the beginning of a long-term decline. Investors need to approach cautiously, keeping a close eye on whether each coin breaks its key Exponential Moving Average 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.*