Dogecoin Digs Itself Into A Bullish Pattern: How To Play The Break

Bitcoin BTC/USD will be accepted as payment at AMC Entertainment Holding Inc.'s AMC theaters by the end of the year, much to the dismay of Dogecoin DOGE/USD enthusiasts who tout the Shiba Inu cryptocurrency the "people’s crypto." 

The adoption of cryptocurrency as payment by large companies adds validity and utility to the space and opens the door for more coins to eventually be accepted.

Blockchain analytics firm Chainalysis sees the value of Dogecoin and on Tuesday announced it had expanded coverage to include the coin saying the crypto had become the “most frequently requested” new coin for the company to cover from its customers in the public and private sectors.

Dogecoin has spent the past four days pawing itself into a bull flag pattern and looks set to soar.

See Also: How to Buy Dogecoin

The Dogecoin Chart: Dogecoin shot up about 28% on Aug. 7 and bust through a resistance level near the 23-cent mark. It has since been consolidating in a tightening range. The single-day increase paired with three days of consolidation has created a bull flag pattern with the pole created Aug. 7 and the flag created between Sunday and Tuesday.

The flag of the pattern is developing into a triangle pattern and Dogecoin is set to meet the apex of the triangle on Aug. 13. Technical traders should watch for high volume when Dogecoin breaks either bullishly up or bearishly down from the triangle to know whether the pattern was recognized.

The three-day consolidation has helped Dogecoin to cool down its relative strength index (RSI) which was approaching oversold territory at the 71% mark.

On Tuesday Dogecoin’s RSI had come down about 10% to a much more comfortable 61% level.

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. Dogecoin is also trading above the 200-day simple moving average (SMA) which indicates overall sentiment in the crypto is bullish. The 200-day SMA has been guiding Dogecoin higher for the better part of the past eight months.

• Bulls want to see big bullish volume enter Dogecoin to break the crypto up bullishly from the flag pattern. If the flag is recognized and Dogecoin breaks to the upside the measured move could bring the crypto up to about the 30-cent level. Dogecoin has overhead resistance at 27 and 31 cents.
• Bears want big selling pressure to push Dogecoin down to break bearishly from the triangle and below support at 23 cents. If Dogecoin can’t hold the level as support it could fall back down toward the 20-cent mark.
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Image by Ishwar Artist from Pixabay