Dogecoin (DOGE) Reverses, But Golden Cross Hits, Hinting Massive Rally: Crypto Market Review, December 2
A fundamental technical signal appears in the market, suggesting that a change in trend is possible
At the end of almost every week, volatility in the cryptocurrency market decreases, with most assets entering either mode of consolidation or revert to their previous values. However, there are important signals that we have no choice but to cover.
Doge’s Gold Cross
As we mentioned earlier, the golden cross is one of the most powerful technical indicators that has proven to be one of the most accurate tools for determining a long-term trend change, especially on longer periods such as a day or a week.
In the case of Dogecointhanks to two massive rallies in November, one of which occurred at the end of October, two exponential moving averages with periods of 50 and 200 days have converged and now form the golden cross signal, which Dogecoin last saw times about two years ago.
Such a strong signal could ultimately become fuel for an extended uptrend for Dogecoin and a signal for speculative traders who had sold the coin even as soon as possible to avoid a local correction. Local corrections often ended even a mid-run recovery on the dog themed room.
According to various backtesting studies on assets with similar volatility to Doge’s, the trend reversal signal was accurate more than 50% of the time, technically making it an effective technical analysis tool that can actually be used in practical trading strategies.
Ethereum’s Failed Breakout
Unfortunately, Ether’s momentum was not enough to easily break through the existing resistance level reflected as a 200-day moving average, and the price of the second-largest cryptocurrency in the market returned. below the price threshold of $1,300.
However, it is too early to call it a day. The inability to break the resistance level could be purely temporary, given that the market is entering a weekend trading session in which most market participants will refrain from trading, making the market less liquid and sometimes less volatile.
As trading markets open on Monday, Ethereum volatility is expected to return to normal, along with the asset’s volume and liquidity. Hopefully positive sentiment prevails among crypto investors, especially after Jerome Powell’s dovish speech on upcoming rate hikes and the overall state of the US economy.
Despite the depression that blanketed the market earlier this month thanks to the FTX implosion, the cryptocurrency industry seems to be doing much better now. The majority of assets entered December with single and even double-digit gains while giving off important market signals that could suggest a gradual market recovery over the next year.
Given the pivot from the Fed, the dust settling around FTX, and the recovery of traditional financial markets, the cryptocurrency could begin to thrive again and finally break the downtrend it started in late 2021.
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