Dogecoin Regains Key Trendline, Elon Musk Sticks Up For 'The Little Guy:' What's Next For The Crypto?

Tesla Inc TSLA CEO Elon Musk took aim on Tuesday at Binance CEO Changpeng Zhao ("CZ") on Twitter Inc TWTR over a Binance error that caused Dogecoin DOGE/USD holders' funds to become stuck on the exchange.

Later, Dogecoin co-creator Billy Markus praised Musk for “standing up for the little guy” and offered advice to all cryptocurrency holders: “keeping your crypto on an unregulated exchange is quite risky.”

Dogecoin has been a risky trade recently for bullish traders lately, with the price over 36% between the Oct. 30 high of $0.34 and Tuesday low-of-day at the $0.214 mark. A reversal could be in the cards if the crypto can regain a key trendline.

See Also: 'Sounds Shady': Elon Musk Takes Aim At Binance Over Treatment Of Dogecoin Customers

The Dogecoin Chart: On Monday, Dogecoin fell below a long-term trendline that has been acting as support since July 20. The bearish break took place on low volume and because there was no follow-through on the move, Dogecoin was able to pop back up above the trendline on Tuesday.

Dogecoin is trading in a fairly consistent downtrend on the daily chart with the most recent lower high printed on Nov. 18 and $0.241 and the slightly lower low printed on Tuesday. If the downtrend is still intact, traders can watch for another lower high before Dogecoin falls back below $0.214.

Tuesday’s lower low is just slightly below the Nov. 18 low of $0.216 and with the price action of each day combined, Dogecoin may have printed a bullish double bottom pattern at the level. If the pattern is recognized, traders will want to watch for increasing volume to come in and push the crypto up higher on Wednesday.

Dogecoin is trading below the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The crypto is also trading below the 50-day simple moving average, which indicates longer-term sentiment is bearish.

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Bulls want to sustain a big bullish volume to cause Dogecoin to close the 24-hour candle above the ascending trendline and then for increasing volume to help the crypto regain the 23-cent level as support. Above the area, there is further resistance at $0.248.

Bears want to see Dogecoin back down below the trendline and then for big bearish volume to come in and push the crypto down below the $0.216 level. If Dogecoin is unable to hold the level as support, it could fall toward $0.196.

Image by KNFind from Pixabay