Dogecoin (CRYPTO: DOGE) was falling slightly during Monday’s 24-hour trading session on lower-than-average volume, consolidating above the 200-day simple moving average (SMA).
The consolidation is taking place within an inside bar pattern on the daily chart. An inside bar pattern indicates a period of consolidation and is usually followed by a continuation move in the direction of the current trend.
An inside bar pattern has more validity on larger time frames (four-hour chart or larger). The pattern has a minimum of two candlesticks and consists of a mother bar (the first candlestick in the pattern) followed by one or more subsequent candles. The subsequent candle(s) must be completely inside the range of the mother bar and each is called an “inside bar.”
A double, or triple inside bar can be more powerful than a single inside bar. After the break of an inside bar pattern, traders want to watch for high volume for confirmation the pattern was recognized.
On Monday, Dogecoin was falling to test support at the 200-day SMA, which has happened on each of the last five days. The crypto regained the 200-day SMA as support on July 25 and has been trading mostly sideways since that date.
The price action of a memecoin like DOGE coin is mainly driven by social media hype. The latest surge in Dogecoin comes due to the Twitter rebranding. Due to Elon Musk’s interest in the dogecoins, crypto holders anticipate these coins to be a part of the tech billionaire’s everything app, X.
“Unlike most other cryptocurrencies, Dogecoin price prediction primarily relies on tweets from Elon Musk. Tweets from the Tesla boss often generate massive volatility spikes in DOGE and SHIB. This makes it very difficult to predict the price action of the top meme coins. However, the advanced technical analysis gives us a few key levels which could act as the lines in the sand for many whales,” said an analyst on the analytics insight website.
There are multiple reasons behind Elon’s obsession with Dogecoin. Musk has a well-known sense of humor and seems to appreciate that Dogecoin is a joke cryptocurrency. The eccentric believes that Dogecoin has the “best humor” of any cryptocurrency. Another reason why the world’s richest man is bullish on Dogecoin is its decentralization. Unlike most other altcoins, no single entity currently controls Dogecoin.
“ Something special coming soon,” said Elon Musk in a tweet, generated massive volatility spikes on the Dogecoin which primarily depends on social media hype as reported on the analytics insight website.
DOGE has a passionate and dedicated community of supporters. Musk has said that he is impressed by the community’s enthusiasm and believes that it could be a key factor in Dogecoin’s success. Considering these views of Elon, the memecoin community expects Dogecoin to be a part of Elon’s upcoming ‘everything app’. The change of the Twitter logo is a part of rolling out the full features of X, which would be an app for everything.
Produced in association with Benzinga
Edited by Eunice Anyango Oyule and Judy J. Rotich