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Dogecoin Breaks Loose! Did Elon Musk Or A Technical Break Out Set The Crypto Free?

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© Reuters. Dogecoin Breaks Loose! Did Elon Musk Or A Technical Break Out Set The Crypto Free?

Dogecoin (CRYPTO: DOGE) shot up about 10% at one point on Sunday, boosted by Tesla, Inc (NASDAQ: TSLA) CEO, Elon Musk, proposing on Twitter (NYSE:TWTR) that users be able to use the crypto to pay for the social media app’s Twitter Blue subscription service.

Dogecoin was also undergoing a technical breakout from a quadruple bottom pattern and an inside bar formation, which Benzinga called out on Saturday.

The breakout launched Dogecoin into a confirmed four-hour uptrend pattern, which is likely to eventually confirm an uptrend pattern on the daily chart if the crypto is able to print a higher low above the quadruple bottom near the 14-cent level.

An uptrend occurs when a stock or crypto consistently makes a series of higher highs and higher lows on the chart.

The higher highs indicate the bulls are in control, while the intermittent higher lows indicate consolidation periods. Traders can use moving averages to help identify an uptrend, with rising lower timeframe moving averages (such as the eight-day or 21-day exponential moving averages) indicating the stock is in a steep shorter-term uptrend and rising longer-term moving averages (such as the 200-day simple moving average) indicating a long-term uptrend.

A stock or crypto often signals when the higher high is in by printing a reversal candlestick such as a doji, bearish engulfing or hanging man candlestick. Likewise, the higher low could be signaled when a doji, morning star or hammer candlestick is printed. Moreover, the higher highs and higher lows often take place at resistance and support levels.

In an uptrend the “trend is your friend” until it’s not, and in an uptrend there are ways for both bullish and bearish traders to participate in the stock:

Bullish traders who are already holding a position in a stock or crypto can feel confident the uptrend will continue unless the crypto makes a lower low. Traders looking to take a position in a crypto trading in an uptrend can usually find the safest entry on the higher low.
Bearish traders can enter the trade on the higher high and exit on the pullback. These traders can also enter when the uptrend breaks and the stock makes a lower low, indicating a reversal into a downtrend may be in the cards.
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The Four-Hour Dogecoin Chart: At 10:00 p.m. on Saturday, Dogecoin shot up over 5% higher before consolidating the subsequent eight hours. The rise paired with the consolidation settled Dogecoin into a bull flag pattern and at 8:00 a.m. on Sunday, the crypto reacted to the bull flag pattern and surged an additional 5% before beginning to consolidate again with an inside bar.

The crypto began trading in an uptrend on the four-hour at 10:00 p.m. on Friday and has since created a consistent series of higher highs and higher lows. The most recent low was printed at 4:00 am on Sunday, and the most recent higher high was printed at 10:30 a.m.
The move higher came on above average volume on shorter timeframes, which indicates a high level of trader and investor interest surged into Dogecoin. When a stock or crypto breaks up or down from a pattern on higher-than-average volume, it confirms the pattern was recognized by algorithms.
On the daily chart, the move higher caused Dogecoin to regain support at the eight-day exponential moving average, which will cause the eight-day EMA to continue trending above the 21-day, which will give bulls more confidence going forward. The crypto is also trading well above the 50-day simple moving average, which indicates longer-term sentiment is bullish.
Eventually, Dogecoin will enter into another period of consolidation and bullish traders and investors who are not already in a position can watch for the crypto to settle into a bull flag pattern or an inside bar pattern on the daily chart. If the crypto prints either of those two consolidation patterns, it will provide a solid entry point on the higher low.
Dogecoin has resistance above at the 16-cent mark and at $0.176 and support below at $0.146 and $0.135.

See Also: Elon Musk Pushes Dogecoin Payment Option For Twitter’s Blue Subscription

© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Dogecoin Breaks Loose! Did Elon Musk Or A Technical Break Out Set The Crypto Free?

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