DOGE’s present price pattern mirrors the one seen in late 2020 and 2016.
A bull cross is set to take effect for the first time since early January 2021.
Dogecoin (DOGE), the world’s biggest meme-focused cryptocurrency, is on a tear, rising 62% this week, already its best performance since February.
A closer look at the DOGE’s weekly price chart shows the cryptocurrency is mirroring a pattern from late 2020 that sparked a 1,500% price surge to 73 cents by early May 2021.
DOGE’s latest surge follows the conclusion of the U.S. presidential election and a year-long period of sideways consolidation, reminiscent of the patterns observed in late 2020 and 2016.
The 50-week simple moving average is poised to cross above the 100-week SMA. This technical analysis pattern is sending a green light to momentum traders who may have been hesitant until now. A similar bullish crossover occurred after the November 2020 U.S. election.
If history is a guide, DOGE could continue to rally in the coming weeks, potentially setting new peaks above the 2021 high of 73 cents.
Other indicators support the constructive outlook. For instance, the 14-week relative strength index has surged past 70, indicating strong upward momentum. The threshold has marked the FOMO (fear of missing out) phase of the 2021 bull run.
Note that memecoins are generally more volatile than market leaders like bitcoin and ether, often changing direction rapidly. Their volatile nature necessitates constant monitoring of positions and strict adherence to risk management tools such as stop-loss strategies for traders.
Omkar Godbole, a chartered market technician, is a CoinDesk senior analyst and co-managing editor for markets. The views expressed here are his own.
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