• Dogecoin price explodes for a 28.14% gain on August 7, branding it as the largest daily gain since the 100.03% rise on April 16.
  • DOGE logs the third consecutive positive week for just the third time in 2021.
  • Mild spike higher in social dominance fails to gain traction, pointing to the lack of FOMO in the market for the token.

Dogecoin price did not attract interest from July 22 to August 6, trading in a tight range and creating the basis for a sharp move, highlighted by the compressing of the Bollinger Bands to a level similar to what preceded the April rally. With the 28.14% gain on August 7, DOGE now trades well above the 50-day simple moving average (SMA) resistance, improving the outlook for the digital asset. It now becomes a question of whether the events on the weekend were technical due to the excessive price compression or the beginning of a sustainable rally.

Dogecoin price is now at an inflection point

Dogecoin price closed last week with a 17.70% gain, marking the best weekly return since the beginning of June, raising the monthly gain to 25.50% at the time of writing and nearly reaching the previously discussed price target of $0.291, the June 25 high.

With the June 25 high test, Dogecoin price is now at an inflection point. If the spike was a technical event due to the significant price compression, DOGE should soon reverse below the 50-day SMA and target a new correction low. 

Alternatively, suppose it is the beginning of a sustainable rally. In that case, Dogecoin price may consolidate around the June 25 high of $0.291, forming a handle of a cup-with-handle pattern that began on June 25.

The measured move of the DOGE cup-with-handle base is 44%, suggesting a price target of $0.417.

As long as Dogecoin price remains above the three highs of July 28 at $0.220, July 30 at $0.222 and August 1 at $0.220 on a daily closing basis, DOGE should complete the cup-with-handle pattern and be primed to explore the price target of $0.417.

DOGE/USD daily chart

DOGE/USD daily chart

Adding to the potential for an important Dogecoin price move is the upcoming bullish Golden Cross pattern on the six-hour chart when the 50 six-hour SMA crosses above the 200 six-hour SMA. The previous Golden Cross occurred at the beginning of April, before the kickstart of the historic DOGE rally. Moreover, the rally in November 2020 was preceded by a Golden Cross on the six-hour chart.

DOGE/USD 6-hour chart

DOGE/USD 6-hour chart

An inability to hold the $0.220 on a daily closing basis defeats the cup-with-handle base scenario and positions Dogecoin price for at least a test of the 50-day SMA at $0.215 and possibly the 200-day SMA at $0.201.

Critical to much of the gains in 2021 was the role of social media dominance and the resulting fear of missing out (FOMO). A rise in social media traffic accompanied the recent burst higher, but the percent of social media traffic associated with DOGE versus a basket of cryptocurrencies has quickly retraced. It is not a bullish development, especially for a digital token that had enjoyed the best times when social media dominance ran over 40% of total traffic.


DOGE Social Dominance - Santiment

DOGE Social Dominance - Santiment

Last week may have been a transformative moment for the Dogecoin price structure or just a brief technical event. How DOGE consolidates the gains will dictate how the inflection point will be resolved, but with social media hype already back at the previous low levels, it casts a shadow on the bullish narrative. 

Here, FXStreet's analysts evaluate where DOGE could be heading next after it hit the forecasted target.

 


Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Three reasons why Chainlink could rally

Three reasons why Chainlink could rally

Chainlink has noted accumulation by large wallet investors for the past two weeks. Nearly $110 million in LINK has been withdrawn from exchanges in this time period. LINK sustained above $13 on Sunday, extending gains by nearly 1%. 

More Chainlink News

Ripple holds on to double-digit gains, highest in top 20 cryptocurrencies

Ripple holds on to double-digit gains, highest in top 20 cryptocurrencies

Ripple rallied over 19% in the past seven days per CoinGecko data. The altcoin broke past resistance at $0.50 on the one-year anniversary of Judge Analisa Torres’ XRP ruling. 

More Ripple News

Bitcoin breaks $60,000 as market anticipates re-election of pro-crypto former President Trump

Bitcoin breaks $60,000 as market anticipates re-election of pro-crypto former President Trump

Bitcoin extended gains post the shooting at the rally of US Presidential candidate Donald Trump. The former President is a pro-crypto candidate, and a report by Fortune shows that Trump’s chances of winning the race increased after the Saturday events.

More Bitcoin News

Ethereum ETF launch could push Ether to new all-time high, on one condition

Ethereum ETF launch could push Ether to new all-time high, on one condition

Ethereum (ETH) traders are watching two key events closely: the anticipated approval of the Spot Ether ETF and the activities of whales, the large wallet investors holding ETH. An analyst has predicted that the odds of Spot Ether ETF is 72.7% this week. 

More Ethereum News

Bitcoin: Investors wonder if BTC troubles are behind

Bitcoin: Investors wonder if BTC troubles are behind

Bitcoin (BTC) stabilized around the $57,000 mark this week, while the German Government persists in transferring Bitcoin to exchanges. Concurrently, US spot Bitcoin ETFs have recorded inflows.

Read full analysis

BTC

ETH

XRP