Dogecoin DOGE/USD was surging almost 9% higher on Monday and Tesla, Inc TSLA CEO Elon Musk used the opportunity to resurface a post of a meme on Twitter he had made exactly one year ago today.
The image was of a photoshopped scene from Walt Disney Co’s DIS 1994 version of “The Lion King” that showed Musk holding up Kiss bassist Gene Simmons who is holding up Snoop Dogg who is, in turn, hoisting a Shiba-Inu into the air. Musk, who is a Dogecoin bull, brought the image to the top of his Twitter timeline by commenting under it with a laughing emoji.
On Feb. 7, 2021, Dogecoin bust up through 73-cent level, which was near the beginning of a massive bull run that brought the crypto up 1,175% from that date to an all-time high of $0.738 on May 8.
On Sunday, Dogecoin’s official Twitter page hit a milestone with over 3 million followers. The record number of social media users following Dogecoin may indicate there is an increasing number of traders and investors trading the crypto, which could account for why Dogecoin has been moving higher over the last few days.
Interest in the crypto sector was renewed recently after Bitcoin BTC/USD and Ethereum ETH/USD reversed course into uptrends, indicating the crypto market may be reversing course into a bull cycle.
Dogecoin has gained about 26% over the last five trading days but will eventually enter into a period of consolidation. Traders and investors who are not already in a position may want to watch for a pullback to enter into a position while keeping in mind risk versus reward in a highly volatile market.
See Also: Do You Think Dogecoin Can Reach $1 Before Ethereum Gets To $10,000, And Cardano Hits $5?
The Dogecoin Chart: Dogecoin may eventually settle into a bullish cup-and-handle pattern on its daily chart, by pulling back into a flag formation after forming a rounded bottom pattern between Jan. 15 and Monday. The move would also set the crypto into a bull flag pattern on the same timeframe if Dogecoin begins to consolidate over the coming days.
Consolidation is likely to happen because Dogecoin’s relative strength index (RSI) has soared up to the 63% level from just 38% five days ago. 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 profit-taking that may occur if the RSI becomes extended could cause the pull back into a cup-and-handle or flag pattern.
The move higher, which has caused Dogecoin to print a large bullish Marubozu candlestick, was being made on far higher-than-average volume. By midafternoon, Dogecoin’s volume was over 544 million compared to the 10-day average of about 222 million, which indicates there is a great deal of interest in the crypto.
Dogecoin is trading above the eight-day and 21-day exponential moving average (EMAs) and on Sunday the eight-day EMA crossed above the 21-day, both of which are bullish indicators. Monday’s move higher has also allowed Dogecoin to regain the 50-day simple moving average as support, which indicates longer-term sentiment has turned bullish.
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- Bulls want to see sustained big bullish volume help Dogecoin to close near its high-of-day price but for eventual consolidation on lower-than-average volume to help the crypto consolidate before becoming overbought. There is resistance above at $0.176 and $0.196.
- Bears want to see big bearish volume come in and knock Dogecoin down to end the 24-hour session by printing a shooting star candlestick, which could indicate lower prices will come on Tuesday. The crypto has support below at 16 cents and $0.146.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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