Dogecoin (CRYPTO: DOGE) was trading flat on Tuesday and lagging behind Bitcoin (CRYPTO: BTC), which broke up bullishly from a descending trendline, and Ethereum (CRYPTO: ETH), which reached a new all-time high of $4,524.20.
The crypto space may have fallen back into its usual cycle where money funnels from the larger cryptos to the alt-coins and vice-versa, although the speed of the cycles seems to have picked up recently.
Things may be shifting slightly in the Dogecoin community because popular fintwit personality and Dogecoin enthusiast @greg16676935420 posted a letter to the “Dogecoin Family” on Twitter Inc (NYSE:TWTR) announcing the end of his term as “fake Doge CEO.” He cited Reddit conspiracies, lies and memes that are being used against him, which are affecting his life outside of Twitter, as the reason.
Many in the Dogecoin community rallied behind the message “Do good every day,” but prominent figures within the group have been voicing concerns around negativity and fighting between Dogecoin traders and investors and those who prefer different dog-themed coins such as Shiba Inu (CRYPTO: SHIB).
Every dog has its day, and traders have had their chance to profit from many of the various dog-themed coins and tokens. Dogecoin traders may be in for another treat if the bullish pattern on the crypto’s chart breaks up.
The Dogecoin Chart: Dogecoin has been holding fairly steady between the 25-cent and 30-cent range for the past five trading days after soaring a massive 46% on Oct. 28. On Tuesday, Dogecoin was in the process of printing an inside bar pattern on the daily chart, with all of the 24-hour trading activity happening within Monday’s price range.
An inside bar is a consolidation pattern and bullish traders may choose to take a position on a break up from the pattern while bearish traders may choose to enter a short position on a break down from the mother bar. When Dogecoin breaks from the pattern, traders will want to watch for high volume to come into the crypto to confirm the pattern was recognized.
The confirmation was needed in Dogecoin because the crypto’s relative strength index (RSI) was measuring in at about 66% on Oct. 28. When a stock or crypto’s RSI nears or reaches the 70% level it becomes overbought, which can be a sell signal for technical traders. The recent consolidation has cooled Dogecoin’s RSI down to a more comfortable 54%, which gives the crypto the potential power for a move higher.
Dogecoin is trading above the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending above the 21-day, both of which are bullish indicators. The eight-day EMA has been acting as a key support level over the past four trading sessions. Dogecoin is also trading above the 50-day simple moving average, which indicates longer-term sentiment is bullish.
- Bulls want to see big bullish volume come in and break Dogecoin up from the inside bar pattern, or for the crypto to create a second inside bar on Wednesday to break up from. The crypto has resistance above at $0.284 and $0.298.
- Bears want to see big bearish volume come in and drop Dogecoin down from the pattern, which will cause the crypto to lose support at $0.263. Below the level, Dogecoin has support at $0.248 and the 23-cent mark.
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Images: Jasdac Stokholm, Flickr, Public Domain