In this light, Dogecoin will be the only cryptocurrency accepted by Tesla, which is an unusual choice. According to CoinMarketCap, Dogecoin moved back into the top-10 coins by market cap after the recent rally, but Musk’s decision to ignore Bitcoin and Ethereum is very interesting.
Daily Chart Technical Analysis
Let’s take a look at how Dogecoin price reacted to the news. Dogecoin managed to get out of the previous downside channel, ignored various resistance levels and made an attempt to settle above the 50 EMA near $0.2150. However, it faced significant resistance near $0.22 and pulled back towards $0.20.
In order to continue its upside move, Dogecoin will need to settle above the 50 EMA and move through the $0.22 – $0.2250 resistance area. It remains to be seen whether there is enough support for this move. Back at the end of October, Dogecoin also enjoyed a strong day, but quickly found itself under pressure and kept moving lower until Musk’s announcement.
On the support side, a move below the 20 EMA near $0.19 will indicate that Dogecoin lost momentum and is ready to return to its previous downside trend. In this case, it will head towards the support level at $0.1820. A successful test of this level will open the way to the test of the support at $0.1725.
Taking a look at the H1 chart, we can see that the recent move was very fast, which is typical for news-driven rallies. RSI moved into the overbought territory, so Dogecoin will likely take a pause as some traders will decide to take profits off the table after the strong rally.
Traders should expect that volatility will remain elevated during the day. A move above the recent highs at $0.22 will show that support for Dogecoin is growing. Without this move, the risk of a near-term pullback will be significant.
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