Dogecoin Surges, Bitcoin And Ethereum Prepare To Soar: A Look At The Cryptos Into The Weekend

Zinger Key Points
  • Bitcoin and Ethereum appear to be consolidating and settling into a bull flat pattern.
  • Dogecoin leads the pack, regaining the 200-day SMA as support to indicate sentiment has turned bullish.

Bitcoin BTC/USD was spiking up about 1.8% higher during Friday’s 24-hour trading session in tandem with the S&P 500, which was surging over 2%.

Ethereum ETH/USD was also rising more than 2%, while Dogecoin DOGE/USD was skyrocketing almost 12% higher after Elon Musk’s deal to purchase Twitter closed.

Read more about Musk’s Twitter takeover here.

Dogecoin regained the 200-day simple moving average (SMA) on Friday, which Benzinga called out on Thursday. Bitcoin and Ethereum were 17% and 8%, respectively, under the 200-day SMA but are settling into bull flag patterns, which could help the two apex cryptos to gain ground over the weekend.

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 Bitcoin Chart: Bitcoin’s 9% surge during Tuesday and Wednesday, paired with Thursday and Friday’s consolidation, may have settled the crypto into a bull flag pattern on the 24-hour chart. If the pattern becomes recognized, the measured move could take the crypto up toward the $22,000 mark.

Traders and investors can watch for Bitcoin to break up from the upper descending trendline of the flag on higher-than-average volume to indicate the pattern was recognized. If the crypto falls under the eight-day exponential moving average, the pattern will be negated.

Bitcoin has been trading in an uptrend since Oct. 21, with the most recent higher high formed on Wednesday at $21,022 and the most recent confirmed higher low printed at the $19,240 mark on Tuesday. If Bitcoin breaks down from the flag formation, bullish traders will want to see the crypto form a bullish reversal candlestick, such as a doji or hammer candlestick, above $19,300 for confidence the uptrend will continue.

Bitcoin has resistance above at $21,313 and $22,720 and support below at $19,915 and $17,580.

  • Ethereum is also trading in a confirmed uptrend pattern, with the most recent higher low created on Monday at $1,324 and the most recent confirmed higher high formed at the $1,595 mark on Wednesday. If Ethereum breaks up through the bull flag pattern, Friday’s low-of-day may mark the next higher low within the uptrend.
  • Ethereum has resistance above at $1,717.41 and $1,957.24 and support below at $1,421.80 and $1,245.

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The Dogecoin Chart: After consolidating on smaller timeframes under the 200-day SMA during Thursday’s 24-hour session, Dogecoin regained the level Friday morning. From a technical standpoint, Dogecoin is now enjoying a bull cycle but it’s not clear how long the sentiment will last.

  • Dogecoin started an uptrend on Oct. 13 but hasn’t formed a higher low since Oct. 21, when the crypto bounced up off the $0.057 mark. Eventually, Dogecoin will retrace lower to print its next higher low and when that happens, bullish traders will want to see a reversal to the upside take place above or on the 200-day SMA.
  • Dogecoin has seen far-above-average volume over the last three 24-hour trading periods, which indicates a high amount of interest in the crypto. As of Friday afternoon, Dogecoin’s volume was measuring in at about 1.15 billion on Coinbase, compared to the 10-day average of 275.95 million.
  • Dogecoin has resistance above at $0.083 and $0.099 and support below at $0.075 and $0.067.

Photo: Shutterstock

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