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Dog-themed cryptocurrency Dogecoin (DOGE) shows signs of a potential trend reversal after weeks of declining. According to crypto analyst Ali, DOGE is printing a bullish reversal doji on the weekly chart, a classic candlestick pattern that often signals a shift in momentum.
After three straight weeks of declines, with the past week's decline reaching as much as 30%, a doji pattern has emerged this week on the Dogecoin weekly chart. The doji pattern reflects market indecision and can indicate that selling pressure is weakening, which might pave the way for a potential price bounce if sustained.
In a separate tweet, Ali noted that Dogecoin’s network activity is also increasing.
Arman ShirinyanActive addresses have surged by 47% in the past month, jumping from 110,000 to 163,000. This increase suggests growing interest and engagement with the DOGE ecosystem.
Dogecoin price action
At the time of writing, Dogecoin was up 2.8% in the last 24 hours to $0.171. After five days of declining, Dogecoin began to rebound from lows of $0.142 on March 11. The significance of this support is that it provided a floor for Dogecoin's rally in early November. The rally extended into Wednesday's trading session, which ended in green.
Tomiwabold OlajideWhile the rebound appears optimistic, with Dogecoin indicating a bullish double bottom at the $0.142 low, it must break major resistance levels to confirm a reversal. If Dogecoin breaks and closes above $0.21, it might climb to the resistance at the 50-day SMA at $0.25.
As Dogecoin shows signs of a potential bullish reversal on its weekly chart, a looming bearish indicator threatens to invalidate this signal. The popular dog coin is on the verge of forming a "death cross" on its daily chart.
A death cross happens when the 50-day moving average falls below the 200-day moving average, indicating further downside.
If this plays out, DOGE could retest lower support levels before any significant recovery. For now, all eyes are on the charts as Dogecoin battles between a bullish reversal and a bearish breakdown.
Dan Burgin
Vladislav Sopov