Dogecoin (CRYPTO: DOGE) hasn’t been able to catch a break since Oct. 28 when the cryptocurrency shot up about 42% higher and wicked off the 34-cent level. The cryptocurrency market looked as though it may be in for a rebound beginning on Nov. 27 when Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) began to trade higher over a series of consecutive days.
Overall market weakness seems to have shaken traders in the alternative financial sector recently, however, and by Wednesday afternoon Ethereum, which has been the strongest of the larger cryptos had given back its daily gains and more.
On Tuesday, Dogecoin co-creator Billy Markus joked on Twitter that he predicts the crypto “will be the currency of the universe by June 9, year 4200,” and offered to be held accountable on that date. The Dogecoin development team has made moves recently to add utility to the crypto, but it hasn’t helped the crypto’s price.
Dogecoin has been plagued by sellers since its transaction fees were slashed on Nov. 8 and the crypto has lost about 30% of its value since that date. If the crypto is able to hold above a key level at $0.192, that may be set to change, however.
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The Dogecoin Chart: Dogecoin has been trading in a consistent downtrend since Nov. 8, making a series of lower highs and lower lows on the daily chart. On Nov. 26, the crypto reached a bottom at $0.192 and has failed to make another lower low below the level, however.
On Nov. 28 the crypto retested the level as support and bounced, which created a tweezer bottom pattern at the level. The pattern is considered bullish when created at the bottom of a downtrend and on Nov. 29 and Nov. 30, Dogecoin reacted to the pattern and shot up almost 10% higher over the course of the two 24-hour sessions.
Dogecoin was unable to continue its run because it banged into an ascending trendline that Dogecoin fell through on Nov. 24. The trendline had been propping the crypto up since July 20 but is now likely to act as an area of resistance.
Over the coming days traders will want to watch to see whether Dogecoin prints a higher low and is then able to shoot up over Tuesday’s high of $0.228, which would indicate a trend change. If the crypto falls below the tweezer bottom pattern, however, it will indicate the downtrend is still intact.
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 well below the 50-day simple moving average, which indicates longer-term sentiment is bearish.
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- Bulls want to see big bullish volume enter Dogecoin to push it up over Tuesday’s high-of-day and then for continued momentum to pop the crypto up over the ascending trendline. Dogecoin has resistance above at the 23-cent level and at $0.248.
- Bears want to see big bearish volume come in and drop Dogecoin down to print a lower low on the chart. There is support below at $0.196 and 16 cents.
