Dogecoin to $1? Watch out for these Moves..
So, there are cryptos and stocks that move solely on fundamentals, and then there are certain stocks and cryptos that rise and crash on the thumbs of certain higher ups. I like those stocks. I like them a lot. Dogecoin is one of those stocks. It started off as a meme and then soared over 24457% in the last 12 months hitting an all-time high at $0.74. It's also patronized by Billionaire Elon Musk (aka the Dogefather), so honestly the growth is not much surprising given his social media following, power, and fame. Dogecoin highly relies on fundamental news, hardly depends on technical analysis, and is pumped by Elon Musk tweets, every now and then. (I mean Elon can literally tweet Woof Woof and Dogecoin will rise 50%.) With all that said, the importance of technical analysis can’t be overlooked. In the B Word Conference, Elon Musk revealed that he owns Bitcoin, Ethereum, and Dogecoin. That alone saw a rise in all three assets. As far as technicals go, let’s move to the price chart of dogecoin.
Dogecoin: Technical Analysis
It’s been more than a month since Dogecoin is dropped under Exponential Moving Averages (EMA) of 9 and 18 considering both the resistance making lower highs and lower lows on 1D timeframe. The price, however, broke once above the indicator but could not hold the position there.
Dogecoin was moving in the downtrend channel mirroring the bitcoin price movement, and both broke that trend in the same manner (Coincidence.. Nope. I got a few conspiracy theories on bitcoin and dogecoin. add my snapchat starrvin_artist. I tend to rant a lot about it there) The vertical Yellow Shaded area shows the breakout with a huge volume spike which was strong and impressive on the H4 timeframe. We have the next local resistance area around $0.21 Green Highlighted area on the chart.
If Bitcoin continues the Hostile Bullish Trend, Dogecoin is likely to break the resistance and move to the upper resistance of $0.245. If Bitcoin can't stay above the shaded area (checkout bitcoin analysis) then the situation is reversed, and it can jump back to the Blue shaded area of strong Buying to collect liquidity around $0.16 to $0.12. (Don't trip, Buy the dip!)
A Volume Profile is an advanced charting study that displays trading activity over a specified period at specified price levels. The study (accounting for user-defined parameters such as several rows and periods) plots a histogram on the chart meant to reveal dominant and/or significant price levels based on volume.
From the Volume Profile, Dogecoin is still moving in the lower high trading area of the lower shaded region in the chart. It’s difficult for a coin to break in any direction from such a region because of many local resistances and supports and only huge volumes or "whales" (Market Manipulators...Elon Musk, Jeff Bezos, Mark Cuban, etc.) can help it. So, if this bullish trend continues, we can guess it to will soar to the upper shaded area and strengthen its value there.
In a nutshell, if there is fundamental news about dogecoin, we should expect a swift move accordingly than expecting it to respect any support and resistance or any indicator no matter what. To trade a strong fundamental coin like this, pay attention to the news and less attention to the charts. Don't ignore the charts, but realize that this coin relies heavily on twitter fingers.
Recomedation: Follow Elon Musk