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Elon Musk’s token resurfaces: DOGE analysis

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In the last few days, the famous dog-headed token has resurfaced with +151%. Driven by the tweets of personalities such as Elon Musk, it is becoming unpredictable and looks like a ticking time bomb. However, in this article we will try to list all the key levels to be prepared for any new market rally or pullback.

DOGE/BTC Analysis

DOGE/BTC pair in 1D (Tradingview)

As every Saturday, my analysis starts with an analysis against bitcoin. This is essential to understand upside or downside movements and can give a lot of insight into the health of the token. Due to the nature of the token, I have opted for a daily view as any prediction on this type of token over the long term seems a bit risky.

The pair had been in a range for over 180 days and we entered and violently broke it to the upside. This breakout of the sideways channel has signaled a mismatch in the token’s performance versus the cryptocurrency market, hence the hyper-performance of the last few days.

However, we are seeing some bearish signals as we quickly broke the upper Bollinger band, which is indicative of price overheating (abnormal bullish move). The response was imminent and we just left a large bullish wick followed by a red candle.

Currently at the first corrective top (0.382 Fibonacci), we are attempting a small range move. A range formation would be extremely bullish, as it would validate this bullish stop and set up a higher return. However, we have very declining volumes, which means there is very little commitment. Therefore, if 0.382 is broken, we will have an immediate return to the long cargo zone.

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Analysis of the week ahead.

DOGE/USD on 1W (Tradingview)

As previously stated I don’t really like to analyze these types of assets in large time units such as 1W, however as a formality I will give you some theoretical levels in case of a bullish rally.

The outperformance against BTC resulted in a large bullish candle that broke our downtrend line. Upon reaching the MA-100, price retraced to the downside leaving only a wick. So I would say that in case of a break of the MA-100 + a validation of the DOGE/BTC level, we could come for the first upside target at $0.331. However, in case of a confirmed rejection, a return to the range will be plausible, and this bullish move will be considered as an overshoot of the mean.

Read also. Cryptocurrencies to counter inflation: reality or idiocy?

See analysis 4 hours

DOGE/USD in 4 hours (Tradingview)

The 4-hour view is sending good bearish signals, we notice a lower first TOP than the previous one, but above all a great divergence in the RSI. Indeed, the indicator is in a prolonged downtrend as the price tries to rally from the highs, which is called bearish divergence and is usually a sign of a trend change. In addition to this indicator, we can see the beginning of a Shoulder Head Shoulder (trend reversal chartist pattern). This pattern has a cost line of $0.117, so if a breakout is confirmed we could retest the MA-100 or even the $0.085 support.

Conclusion

In conclusion, I would say to be cautious with the DOGE, we have a lot of bearish elements in the short term and little bullish commitment. It is quite possible that this rally is just media induced nonsense, and we will retake our sideways trend. This analysis is by no means investment advice, I encourage you to DYOR on your own.

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