Elon Musk Lets Dogecoin Out For Short Sprint Higher: Here's Why The Crypto Came Back Down

Dogecoin DOGE/USD was trading flat during Wednesday’s 24-hour trading session, continuing to consolidate mostly sideways.

Overnight, the Shiba Inu-based crypto was sliding lower but reversed course into an uptrend on smaller time frames beginning at 3:45 a.m. EST.

Dogecoin’s rebound turned into a rally at 4:40 a.m. after Tesla CEO Elon Musk shared on Twitter that it is “High time (he) confessed (he) let the Doge out.”

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The tweet sent Dogecoin surging 5.25% over the course of five minutes, where the crypto topped out just under the 9-cent level. The crypto then entered into a downtrend on smaller time frames, consolidating the spike and falling back into Dogecoin’s longer-term pattern, which has the crypto trading within a falling channel pattern within a larger triangle formation on the daily time frame.

The Dogecoin Chart: On larger time frames, Dogecoin’s daily trading range has been tightening into a triangle pattern, with the crypto set to meet the apex of the formation on March 2. Traders and investors can watch for Dogecoin to eventually break up or down from the triangle on higher-than-average volume to determine that the pattern was recognized and gauge future direction.

• Within the triangle, Dogecoin has also settled into a falling channel pattern on the daily chart. The pattern is considered bearish until a stock or crypto breaks up from the upper descending trendline on higher-than-average volume, which can signal a longer-term reversal to the upside. If that happens, a break from the triangle will also take place.
• Dogecoin was working to print a long-legged doji candlestick during Wednesday’s session, which may signal that the next lower low within the downtrend has occurred. If the candlestick is recognized, Dogecoin could break up from the channel or continue to trade sideways, possibly printing an inside bar.
• Dogecoin’s relative strength index (RSI) has been hovering near the 50% level, which indicates a current equilibrium and suggests the crypto could move in either direction for a long period of time before becoming either overbought or oversold.
• Dogecoin has resistance above at $0.091 and $0.099 and support below at $0.083 and $0.075.