Will This Bullish Pattern Dominate Dogecoin's Chart?

Zinger Key Points
  • Dogecoin has settled into an imperfect bull flag pattern on the daily chart.
  • Bullish traders want to see the crypto close the 24-hour trading session above the eight-day EMA

Dogecoin DOGE/USD was trading almost 5% lower at one point during Tuesday’s 24-hour trading session after failing to regain the 50-day simple moving average on Sunday and Monday, which enticed sellers into the crypto.

The retracement lower has settled Dogecoin into a possible bull flag pattern, although the formation is imperfect because of the gradually sloping pole.

The bull flag pattern is created with a sharp rise higher forming the pole, which is then followed by a consolidation pattern that brings the stock lower between a channel with parallel lines or into a tightening triangle pattern.

  • For bearish traders, the "trend is your friend" (until it's not) and the stock may continue downwards within the following channel for a short period of time. Aggressive traders may decide to short the stock at the upper trendline and exit the trade at the lower trendline.
  • Bullish traders will want to watch for a break up from the upper descending trendline of the flag formation, on high volume, for an entry. When a stock breaks up from a bull flag pattern, the measured move higher is equal to the length of the pole and should be added to the lowest price within the flag.

A bull flag is negated when a stock closes a trading day below the lower trendline of the flag pattern or if the flag falls more than 50% down the length of the pole.

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The Dogecoin Chart: Dogecoin reversed course into a possible bull flag pattern on June 18, when the crypto tested an important psychological level at 5 cents and bounced, reversing course into an uptrend. The pole of the pattern was formed between that date and Sunday, and the flag has been forming over the 24-hour trading periods that have followed.

  • If the bull flag becomes the recognized pattern, the measured move is 58%, which suggests Dogecoin could surge up over the 10-cent mark. If Dogecoin continues to fall lower and closes a trading session below the eight-day exponential moving average (EMA), the bull flag will be negated.
  • Dogecoin is also trading in an uptrend pattern, with the most recent higher low printed on June 22 at $0.061 and the most recent higher high formed at the $$0.078 mark on Monday.
  • If the bull flag is negated, bullish traders can watch for a possible reversal candlestick, such as a doji or hammer candlestick, to form above $0.062, which could also offer traders a solid entry point.
  • The move lower on Tuesday was taking place on lower-than-average volume, which indicates consolidation as opposed to fear selling. At press time, Dogecoin’s volume was measuring in at about 209 million on Coinbase compared to the 10-day average of 484.25 million.
  • Bullish traders want to see Dogecoin hold above the eight-day and 21-day EMAs and then for the eight-day EMA to cross above the 21-day, which would be bullish. Bearish traders want to see big bearish volume come in and drop Dogecoin down below 6 cents, to negate the uptrend.
  • Dogecoin has resistance above at $0.083 and just below 10 cents and support below at $0.065 and the 5-cent level.

See Also: Dogecoin, Shiba Inu Cut From Crypto.com Rewards Program

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