On Monday morning, Benzinga asked its followers on Twitter what they’re buying at the open. From the replies, Benzinga selected one ticker for technical analysis.
@Maithin53351931, @aedfr3214 and @ChengDuEdison are buying Baby Dogecoin BABYDOGE/USD.
Unlike apex cryptocurrencies Bitcoin BTC/USD and Ethereum ETH/USD, which have been declining for months following their Nov. 10 respective $68,789.63 and $4,867.81 all-time highs, Baby Dogecoin more recently reached a new all-time high of $0.000000006341 on Jan. 17.
Baby Dogecoin has shown strength in comparison to other Shiba Inu-inspired cryptos such as Dogecoin DOGE/USD and Shiba Inu SHIB/USD in 2022 as well. Although on Jan. 21, Baby Dogecoin finally succumbed to the bearish pressure in the crypto sector and fell from $0.000000006024 to $0.000000002800 over the course of just 48 hours.
Since then, the crypto has been consolidating sideways but may be settling into a bearish pattern that the bulls will need to negate soon, or more downside could be in the cards.
See Also: Why Is Dogecoin Plunging Today And Is It Losing This Fandom Battle To Shiba Inu And Safemoon?
The Baby Dogecoin Chart: Baby Dogecoin has been consolidating sideways in a double inside bar pattern on the daily chart, with the mother bar printed on Saturday and the double inside bars on Sunday and into Monday. The pattern leans bearish because the mother bar is a bearish red Marubozu.
The double inside bar pattern could also be turning into a bear flag pattern, and traders can watch for the daily trading range to continue to tighten. In order for the bull flag to be negated, the bulls will need to push the crypto up above the eight-day exponential moving average (EMA), which would require a bullish break from the inside bar formation.
Although the drop on Jan. 21 and Jan. 22 was massive, Baby Dogecoin needs to cool its relative strength index (RSI), which had been measuring in well above the 70% level. When a stock or crypto’s RSI reaches or exceeds that level, it becomes overbought, which can be a sell signal for technical traders.
Baby Dogecoin is trading below the eight-day and 21-day EMAs, but the eight-day EMA is still trending above the 21-day, which indicates indecision. The crypto is trading above the 50-day simple moving average (SMA), which indicates longer-term sentiment is bullish.
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- Bulls want to see big bullish volume come in and drive Baby Dogecoin up above the eight-day EMA and above a resistance level at $0.000000004650, which will negate the bear flag and cause the inside bar pattern to break bullishly. There is resistance above that level at $0.000000005182 and at the all-time high level.
- Bears want to see big bearish volume come in and break Baby Dogecoin down from the patterns and for bearish momentum to drop the crypto down below the 50-day SMA. There is support below at $0.000000003600 and $0.000000003230.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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