Dogecoin bulls have managed to keep their price stable after a 27 percent increase on August 5. DOGE had been trading sideways since the end of July, so the rally was much needed. So, what does this mean for the well-known meme coin? Is another price increase on the horizon? At the time of writing, the alt was trading at $0.267 and ranked seventh in CoinMarketCap’s cryptocurrency rankings.
Daily Dogecoin Chart
The key to Dogecoin’s movement appeared to be its 200-SMA (green). Over the last few weeks, the long term moving average line has provided support to DOGE and, at times, has even prevented a prolonged market decline. This situation was slightly different on the 4-hour chart.
Since May 19, the 200-SMA has been bearish and has rejected multiple breakout attempts in recent months. DOGE finally broke above its 17th June swing high of $0.205 and registered a 3-week high of $0.283 last week, reversing the trend. Prices, on the other hand, remained within the confines of a horizontal channel on the daily chart and awaited a key move in the coming days for another rally. A close above the 25th June swing high of $0.289 could be the catalyst for such a move, in which case another 19 percent surge towards $0.340 is possible.
For the first time in nearly two months, the RSI rose above 55 last week. The index even maintained its course, aiming for a second peak in the overbought zone. A move above 70 would increase the likelihood of further upside before sellers enter the market.
The Awesome Oscillator also detected a significant increase in buying momentum over the last few days. Furthermore, the ADX rose above 25, indicating a strengthening market trend. While these factors were undoubtedly supportive of another DOGE hike, the shorter timeframe (4-hour) revealed several bearish divergences. This meant that DOGE traders might have to remain calm before the currency’s next upward leg. In fact, a minor retracement was also possible prior to the anticipated upswing.
DOGE needed to close above $0.289 on its daily chart before it could make its next big move. Prices may retrace slightly before such an outcome, as the lower timeframe noted some bearish divergences on the RSI and MACD (not shown). Traders can go long DOGE if the price falls to $0.227 and the pattern’s half-line.