Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

As Dogecoin Continues To Nap, Here's Where The Bulls And Bears Could Step In

Published 03/06/2022, 20:52
Updated 03/06/2022, 21:40
© Reuters.  As Dogecoin Continues To Nap, Here's Where The Bulls And Bears Could Step In

© Reuters. As Dogecoin Continues To Nap, Here's Where The Bulls And Bears Could Step In

Dogecoin (CRYPTO: DOGE) was trading about 3% lower on Friday, in a continued sideways lull between the range of $0.075 and 9 cents that has plagued the crypto for much of the last three weeks.

The sideways trading pattern has been due to lower-than-average volume, which indicates a current lack of interest in the crypto from both the bulls and the bears. The consolidation has also formed Dogecoin into a double inside bar pattern on the daily chart.

An inside bar pattern indicates a period of consolidation and is usually followed by a continuation move in the direction of the current trend.

An inside bar pattern has more validity on larger time frames (four-hour chart or larger). The pattern has a minimum of two candlesticks and consists of a mother bar (the first candlestick in the pattern) followed by one or more subsequent candles. The subsequent candle(s) must be completely inside the range of the mother bar and each is called an "inside bar."

A double, or triple inside bar can be more powerful than a single inside bar. After the break of an inside bar pattern, traders want to watch for high volume for confirmation the pattern was recognized.

  • Bullish traders will want to search for inside bar patterns on stocks that are in an uptrend. Some traders may take a position during the inside bar prior to the break while other aggressive traders will take a position after the break of the pattern.
  • For bearish traders, finding an inside bar pattern on a stock that's in a downtrend will be key. Like bullish traders, bears have two options of where to take a position to play the break of the pattern. For bearish traders, the pattern is invalidated if the stock rises above the highest range of the mother candle.
Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.

The Dogecoin Chart: Dogecoin’s double inside bar pattern has formed over the last three 24-hour trading periods, with the mother bar created on Wednesday and the inside bars formed on Thursday and Friday. The pattern is neutral in this case because Dogecoin isn’t showing other bearish or bullish signs in combination with the inside bars.

  • Dogecoin’s lower-than-average volume will eventually be followed by an influx of volume to break the crypto from the inside bars and sideways trading pattern. Traders and investors can watch for a break of the mother bar on higher-than-average volume over the coming days to gauge future direction.
  • Dogecoin is trading below the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day, both of which are bearish signals. The eight-day EMA has been acting as heavy resistance for a few months and if Dogecoin is unable to regain the level the indicator may continue to guide the crypto lower.
  • Dogecoin has resistance above near 10 cents and the 12-cent mark and support below at $0.075 and $0.065.

See Also: How to Read Candlestick Charts for Beginners

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

Read at Benzinga

Read the original article on Benzinga

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.