Famous analyst Ali Martinez recently pointed out that Dogecoin (DOGE) has just shown a short term buy signal on the Tom Demark (TD) Sequential indicator – the same indicator that caught this memecoin's latest local peak.
TD Sequential and how it works
TD Sequential is one of the prominent technical analysis tools developed to assist traders in identifying potential reversal points in the price movements of assets. Instead of focusing solely on the overall trend, this indicator delves into measuring the "exhaustion" of a trend, thereby providing alerts when the market is likely to change direction.
The mechanism of TD Sequential operates based on the process of counting candles of the same color, meaning the same upward or downward trend. When the price chart shows a sequence of nine consecutive extreme candles, the indicator will signal that the current trend has reached its final stage and the market may soon reverse.
The signal provided by TD Sequential is two-dimensional, completely dependent on the polarity of the previous candle series. If nine consecutive candles are green, it indicates that the uptrend may have become saturated and the price is at risk of a downward adjustment. Conversely, if nine consecutive candles are red, the selling pressure may have been exhausted, opening up opportunities for a short term price recovery.
Thanks to its ability to identify the market's "fatigue points," TD Sequential is often combined by investors with other tools such as support-resistance or oscillators to enhance accuracy before making trading decisions.
TD Sequential signal of Dogecoin
According to the latest analysis from Ali Martinez, Dogecoin has just completed a TD Sequential pattern on the 1-hour time frame, right after the price surpassed the 0.22 USD mark on Wednesday. This cycle ended with nine consecutive green candles – a classic signal of potential "exhaustion" in the uptrend. True to the theory, immediately after the signal appeared, DOGE quickly entered a pullback, demonstrating the indicator's accuracy in catching short-term peaks.
A more noteworthy point is that this drop has created another TD Sequential pattern, this time consisting of nine consecutive red candles. If the previous signal was a warning that the market needed to correct after a hot rally, then the new signal could play a reverse role: indicating the possibility of a short term price recovery. This is even more significant when placed in the context that the previous signal "caught the peak" near 0.22 USD – indicating that TD Sequential is effectively working on the short term fluctuations of DOGE.
However, the issue lies in whether this signal has enough strength to sustain a lasting increase or if it is merely a technical rebound. To answer this, additional on-chain data needs to be considered.
On-chain perspective: DOGE whales sitting out
Data from Santiment, shared by Martinez, shows the holding trend of DOGE "whales" – the group of wallets that own between 10 million to 100 million DOGE. This is a group that has the potential to create a significant impact on the supply – demand of the market.
The supply distribution chart shows that the total holdings of this group have been flat for several weeks, with no signs of increased accumulation or sharp distribution. This means that large investors seem to be waiting, not wanting to "make a move" in the current phase.
From an analytical perspective, the fact that Dogecoin whales are temporarily sitting on the sidelines brings both positive and negative signals. On the positive side, the market is not facing strong sell-off pressure from wallets holding large volumes, thus creating conditions for the short term recovery signal from TD Sequential to have a chance to take effect. However, on the downside, the absence of large capital flows also means a lack of sustainable momentum to maintain the upward trend. This means that any recovery in the short term may only stop at a "technical bounce" rather than becoming the starting point for a long-term growth trend.
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The signal that has been hitting the peak of Dogecoin is now issuing an order: It's time to buy!
Famous analyst Ali Martinez recently pointed out that Dogecoin (DOGE) has just shown a short term buy signal on the Tom Demark (TD) Sequential indicator – the same indicator that caught this memecoin's latest local peak.
TD Sequential and how it works
TD Sequential is one of the prominent technical analysis tools developed to assist traders in identifying potential reversal points in the price movements of assets. Instead of focusing solely on the overall trend, this indicator delves into measuring the "exhaustion" of a trend, thereby providing alerts when the market is likely to change direction.
The mechanism of TD Sequential operates based on the process of counting candles of the same color, meaning the same upward or downward trend. When the price chart shows a sequence of nine consecutive extreme candles, the indicator will signal that the current trend has reached its final stage and the market may soon reverse.
The signal provided by TD Sequential is two-dimensional, completely dependent on the polarity of the previous candle series. If nine consecutive candles are green, it indicates that the uptrend may have become saturated and the price is at risk of a downward adjustment. Conversely, if nine consecutive candles are red, the selling pressure may have been exhausted, opening up opportunities for a short term price recovery.
Thanks to its ability to identify the market's "fatigue points," TD Sequential is often combined by investors with other tools such as support-resistance or oscillators to enhance accuracy before making trading decisions.
TD Sequential signal of Dogecoin
According to the latest analysis from Ali Martinez, Dogecoin has just completed a TD Sequential pattern on the 1-hour time frame, right after the price surpassed the 0.22 USD mark on Wednesday. This cycle ended with nine consecutive green candles – a classic signal of potential "exhaustion" in the uptrend. True to the theory, immediately after the signal appeared, DOGE quickly entered a pullback, demonstrating the indicator's accuracy in catching short-term peaks.
A more noteworthy point is that this drop has created another TD Sequential pattern, this time consisting of nine consecutive red candles. If the previous signal was a warning that the market needed to correct after a hot rally, then the new signal could play a reverse role: indicating the possibility of a short term price recovery. This is even more significant when placed in the context that the previous signal "caught the peak" near 0.22 USD – indicating that TD Sequential is effectively working on the short term fluctuations of DOGE.
However, the issue lies in whether this signal has enough strength to sustain a lasting increase or if it is merely a technical rebound. To answer this, additional on-chain data needs to be considered.
On-chain perspective: DOGE whales sitting out
Data from Santiment, shared by Martinez, shows the holding trend of DOGE "whales" – the group of wallets that own between 10 million to 100 million DOGE. This is a group that has the potential to create a significant impact on the supply – demand of the market.
The supply distribution chart shows that the total holdings of this group have been flat for several weeks, with no signs of increased accumulation or sharp distribution. This means that large investors seem to be waiting, not wanting to "make a move" in the current phase.
From an analytical perspective, the fact that Dogecoin whales are temporarily sitting on the sidelines brings both positive and negative signals. On the positive side, the market is not facing strong sell-off pressure from wallets holding large volumes, thus creating conditions for the short term recovery signal from TD Sequential to have a chance to take effect. However, on the downside, the absence of large capital flows also means a lack of sustainable momentum to maintain the upward trend. This means that any recovery in the short term may only stop at a "technical bounce" rather than becoming the starting point for a long-term growth trend.
Taylor