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Dogecoin (DOGE) on Verge of Rare Weekly Golden Cross?

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Sat, 11/05/2024 - 12:00
Dogecoin (DOGE) on Verge of Rare Weekly Golden Cross?
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As the cryptocurrency market continues to navigate the current uncertainties, traders and analysts are keeping a careful eye on a potentially major technical formation for Dogecoin price: a moving average crossover on its weekly chart.

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The nature of the crossing would determine whether it is a death cross, which is a bearish signal, or a golden cross.

A golden cross occurs when a shorter-term moving average, typically the 50-day moving average, crosses above a longer-term moving average, such as the 200-day moving average. This bullish signal is often interpreted as a strong indication of upward momentum and potential price increases.

While golden crosses can occur on various time frames, a weekly golden cross holds particular significance as it reflects longer-term trends and investor sentiment.

TradingView
DOGE/USD Weekly Chart, Courtesy: TradingView

In the case of Dogecoin, the 50-week SMA is rising north and appears likely to move above the 200-week SMA, which may result in a golden cross formation in the coming weeks. While expectations are in place for a golden cross, traders might need to watch for the nature of the crossing to affirm this.

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Dogecoin's journey toward this impending crossover has been marked by a series of ups and downs. Following a steady decline since May 6 from highs of around $0.168, the dog-themed coin has shown resilience, finding support around the $0.142 level.

At the time of writing, Dogecoin was trading down 4.68% in the last 24 hours to $0.144 as the crypto market faced selling pressure.

Implications of potential golden cross

The last time Dogecoin witnessed a weekly golden cross was in early January 2021, resulting in an astonishing 7,996% price increase over the next four months. Dogecoin later rose to an all-time high of $0.737 on May 8, 2021.

While past success is no guarantee of future results, the prospect of another golden cross has certainly captured the imagination of the DOGE community.

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For traders, the golden cross is a signal to watch closely, as it could indicate the beginning of a new uptrend. However, it's important to approach such indicators with caution, as they can sometimes lead to false signals, trapping traders on the wrong side of the market.

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