The femtocell is a promising technology that can be employed to enhance next generation wireless network coverage. It possesses the potential to reduce network deployment risk, improve network operation efficiency and capacity. By utilizing femtocells spectrum utilization can be improved. Due to its key features, including low cost, high speed, and plug and play capability, network operators should employ femtocells in next generation mobile cellular networks. Femtocell deployment is complicated in dense deployment scenarios due to the potential for coverage gaps. In this paper, a coverage optimization algorithm is proposed that reduces the coverage gaps, overshooting femtocells and improves SNR. The coverage optimization algorithm includes two power allocation approaches that continuously update the network transmission power level based on network performance. Results show that the proposed algorithm improves the overall network performance by reducing coverage gaps and femtocell overshooting.