How can you tell if dogecoin’s rebound is more bark than bite? Take a look at our comments to MarketWatch giving a technical perspective on the popular crypto!
TrendSpider’s, chief market analyst Jake Wujastyk, said that if the asset can contend with selling from newbie investors who may be eager to sell the asset around 54 cents, then its trajectory may be more clearly bullish.
“If $DOGE can get through this area, the next level above would be the previous highs hit in early May around 74 cents,” wrote the analyst.
“Coinbase offering Dogecoin will definitely add more liquidity to the market for Doge but not necessarily guaranteed to make it move higher,” he said.
Dogecoin moved down to the volume shelf around .35 earlier in the week (an area where people who originally had profits in the .40s+, were back to breakeven). This is exactly where technical traders should have expected a bounce as supply dried up in this area (due to a lack of profits held by those that held Doge around .35 originally). This flush in price to the mid-.30s was conveniently timed right before this announcement by Elon Musk. On the way up, Dogecoin is now hitting the volume shelf above shown by the “anchored volume by price” on TrendSpider. This “shelf” is an area of large volume where people originally bought and held at a loss as the price dropped to .35 and are now back to breakeven as the price gets back to around .54. Some traders will likely sell and get out after they dealt with almost a 35-40% drawdown. If it can get through this area, the next level above would be the previous highs hit in early May around 74 cents. Coinbase offering Dogecoin will definitely add more liquidity to the market for Doge but not necessarily guaranteed to make it move higher.
I cannot speak to this but I do think Elon Musk is doing anything he can to push the price to the upside.
A Techincal Look At Price Action: