Dogecoin price settling down after whipsaw trading
|- Dogecoin price recovers after a very nervous two days of trading.
- DOGE price is set to confirm its gains with a bounce off the $0.1357 technical level.
- Expect to see a rally back towards $0.1594, which would result in a 17% gain intraday.
Dogecoin (DOGE) price saw nervous whipsaw price action on Monday and Tuesday. At the start of the week Dogecoin excelled from the spillover of Elon Musk buying Twitter, triggering a Musk-related rally in cryptocurrencies. But on Tuesday, sentiment changed with stocks being hammered and weighing on cryptocurrencies that saw heavy selling and quick profit-taking, triggering a complete pairing back of the incurred gains. Expect to see a pop higher today as investors look beyond the noise, that should pull Dogecoin price higher to $0.1600, resulting in a 17% gain.
DOGE price back in favour and set to lock in 17% gains
Dogecoin price must be giving investors headaches after first being up 20% on Monday and next dropping 13% on Tuesday. The reason was that Dogecoin was linked to Elon Musk and the confirmation that he reached an agreement to buy Twitter, which made his favourite cryptocurrencies rally. But markets poured cold water on that sentiment on Tuesday. Investors were shocked by disappointing earnings coming in with several warnings for the following quarters. Companies saw inflation biting away at their profit margins, forcing them to raise prices sooner. To make matters even worse, with the lockdowns in China, supply chain disruptions could provide more pain down the line in the following quarters if sales fall short of estimates.
DOGE price sees investors looking beyond all this and are welcoming the supportive policy stance from the Chinese government opening up its coffers and looking to modernise infrastructure in China. That should help speed up expeditions and could help resolve any supply chain issues relatively quickly. With that refound trust and ease, expect DOGE price to rally back to $0.1594, where a close above the monthly R1 resistance level could set the scene for a continuation towards $0.1750 and result in a retest of the 200-day Simple Moving Average (SMA).
DOGE/USD daily chart
Investors could get scared away again should earnings from Facebook or Apple today or tomorrow disappoint. With a nosedive in the Nasdaq index, a spillover to cryptocurrencies could easily ensue and see DOGE fall back to the pivot level at $0.1357. If DOGE price slips below the 55-day SMA coinciding with the monthly pivot at $0.1339, expect an acceleration with a falling knife move to $0.1137, towards the monthly S1 support level.
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