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Dogecoin (DOGE) Reverses, But Golden Cross Occurs, Hinting at Massive Rally: Crypto Market Review, Dec. 2

Fri, 12/02/2022 - 23:50
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Arman Shirinyan
Fundamental technical signal appears on market, suggesting change of trend is possible
Dogecoin (DOGE) Reverses, But Golden Cross Occurs, Hinting at Massive Rally: Crypto Market Review, Dec. 2
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By the end of almost every week, the volatility of the cryptocurrency market decreases, with most assets either entering consolidation mode or reversing to their previous values. However, there are some important signals we have no other choice but to cover.

Doge's golden cross

As we mentioned previously, the golden cross is one of the strongest technical indicators that has proven to be one of the most accurate tools for determining a long-term trend change, especially on longer timeframes like one day or one week.

DOGE Chart
Source: TradingView

In the case of Dogecoin, thanks to two massive rallies in November, one of which occurred by the end of October, two exponential moving averages with periods of 50 and 200 days converged and are now forming the golden cross signal, which Dogecoin last saw around two years ago.

Such a strong signal might finally become fuel for a prolonged uptrend for Dogecoin and a signal for speculative traders who had been selling the meme coin as soon as possible in order to avoid a local correction. Local corrections often ended even a midterm rally on the dog-themed coin.

According to various backtesting studies on assets with volatility similar to Doge's, the trend reversal signal was accurate more than 50% of the time, which technically makes it an effective technical analysis tool that may in fact be used in practical trading strategies.

Ethereum's failed breakout

Unfortunately, Ether's momentum was not enough to easily work through the existing resistance level reflected in the form of a 200-day moving average, and the price of the second biggest cryptocurrency on the market reversed back below the $1,300 price threshold.

DOGE and SHIB Price Analysis for December 2

However, it is too early to call it a day. The inability to break the resistance level could be purely temporary, considering the market is entering a weekend trading session in which most market participants will abstain from trading, which makes the market less liquid and sometimes less volatile.

As tradfi markets open on Monday, Ethereum's volatility should return to normal, along with the volume and liquidity of the asset. Hopefully, positive sentiment prevails among crypto investors, especially after Jerome Powell's dovish speech about the next rate hikes and the overall state of the U.S. economy.

Market blossoming

Despite the depression that covered the market at the beginning of the 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 flashing some important market signals that may suggest the gradual recovery of the market in the next year.

Crypto market
Source: Coin360

Considering the Fed's pivot, the dust settling around FTX and the recovery of traditional financial markets, cryptocurrency might once again start prospering and finally break the downtrend it entered back at the end of 2021.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.