Many alt-coins in the cryptocurrency market were getting a relief bounce after falling in sympathy with the leaders Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH), which fell 15% and 14%, respectively, this week.
Dogecoin took the hit harder and fell over 17% over the course of the week to a Thursday low-of-day at the $0.216 mark. The recent plummet has added a bump to the road for Dogecoin enthusiasts who had hoped the crypto would reach $1 by year-end.
Whether the bullish price action on Friday is a mere relief bounce or the beginning of a reversal to the upside has yet to be confirmed, but there is one promising pattern that has emerged on the Dogecoin chart.
The Dogecoin Chart: After reaching another lower low of $0.223 on Nov. 16 Dogecoin bounced up just above the 24-cent mark on Thursday to print another consecutive lower high, which confirmed the downtrend is still intact. The crypto then fell to a Thursday low-of-day at $0.216 and closed the 24-hour session up slightly from the level.
On Friday, Dogecoin fell down to retest the level and bounced. Paired with the price action on Thursday, the crypto has now printed a bullish double bottom pattern. If the double bottom pattern is recognized, traders can watch for high volume on Saturday to move Dogecoin’s price up higher to confirm the pattern.
Dogecoin is also trading in a bearish inside bar pattern, however, with Friday’s price range completely within Thursday’s range. The inside bar pattern gives both bulls and bears clear levels to watch because if the crypto breaks up from Thursday’s mother bar on Saturday higher prices are likely to come whereas if Dogecoin breaks below from the mother bar lower prices are likely in the cards.
Dogecoin may be abiding by a second lower ascending trendline running from the July 20 low of 16 cents. If the crypto continues to close the trading sessions above the level the ascending trendline may continue to guide the Dogecoin higher.
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 see big bullish volume come in and push Dogecoin up above the $0.241 level, which would be the first indication a trend reversal may be on the horizon. The crypto has resistance at $0.248 and $0.263.
- Bears want to see big bearish volume come in and break Dogecoin down from the mother bar. The crypto has support below at $0.196 and the 16-cent mark.