Dogecoin Consolidates Recent 50% Surge: Is the Crypto Preparing for Another Leap Forward? – Dogecoin (DOGE/USD)

Dogecoin DOGE/USD was consolidating in Monday’s 24-hour trading session after surging more than 50% between Nov. 21 and Sunday to hit a high of $0.107.

Consolidation was taking place in an inside bar patternwhich saw Dogecoin trading around 4% lower than Sunday’s session close.

An inside bar pattern indicates a period of consolidation and is usually followed by continued movement in the direction of the current trend.

An inside bar pattern has more validity over longer time frames (four hour chart or longer). 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 following candles. The next candle(s) must be completely inside the parent bar’s range and each is called an “inside bar”.

A double or triple inside bar can be more powerful than a single inside bar. After the breakout of an inside bar pattern, traders want to watch for high volume to confirm that the pattern has been recognized.

  • Bullish traders will want to look for inside bar patterns on stocks that are in an uptrend. Some traders may take positions during the inside bar before the break while other aggressive traders will take positions after the pattern break.
  • For bearish traders, it will be essential to find an inside bar pattern on a security that is in a downtrend. Like bullish traders, bearish traders have two options to take a position to play the breakout of the pattern. For bearish traders, the pattern is invalidated if the stock breaks above the higher range of the parent candle.

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The Dogecoin chart: Dogecoin recently decoupled from Bitcoin BTC/USD and Ethereum ETH/USD, showing high levels of bullish volatility while apex cryptos traded slightly lower on mostly falling volume. Compared to Bitcoin and Ethereum, Dogecoin looks much more bullish over the next few trading days.

  • During Monday’s 24-hour trading session, Dogecoin held steady near the $0.095 mark despite falling Bitcoin and Ethereum prices, as well as the general market. If Dogecoin closes the trading day with a significantly lower wick, the crypto will print a hammer candlestick, which could indicate higher prices in Tuesday’s session.
  • Dogecoin’s inside bar is bullish because the crypto was trading higher before forming the pattern and because the inside bar was printing near the upper range of Sunday’s parent bar. Bullish traders will want to see Dogecoin break out of Sunday’s range on above-average volume later on Monday or Tuesday, allowing the crypto to reclaim the 10-cent zone as support.
  • Eventually, Dogecoin will print a bearish reversal candlestick, which could indicate that a downward retracement is on the horizon to print a higher low. When this happens, bullish traders would like to see the crypto hold above the 50-day simple moving average.
  • Dogecoin has resistance above 10 cents at 12 cents and $0.135 and support below at $0.083 and $0.075.

See also: Dogecoin Jumps Over 10 Cents – What’s Next For Memecoin?

Photo via Shutterstock.

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