- Elon Musk pumps Dogecoin on Twitter, but the rally is short-lived.
- Technical indicators imply that the coin is ready for a bearish correction.
Dogecoin (DOGE) stormed into top-50 amid the FOMO triggered by Elon Musk's tweet. The message of Tesla's CEO contained only one word "DOGE"; however, that was enough for the coin's supporters to start buying it like there is no tomorrow.
DOGE gained over 30% in a matter of hours and touched $0.0055, the highest level since July 8, when the coin briefly reached $0.0056 before collapsing back below $0.004. At the time of writing, DOGE is changing hands at $0.0047. Despite the sell-off, the coin is still 12% higher on a day-to-day basis. The weekly gains exceeded 50%.
DOGE's market capitalization reached $627 million, while its average daily trading volume is registered at $689 million. The token is most actively traded at Binance, Huobi Global, and HBTC. This Litecoin fork was created in 2013 as a joke. However, the coin based he popular "doge" Internet meme quickly gained popularity. Now it is touted by numerous high-profile personas, including Elon Musk.
The correction is underway
A popular crypto Twitter analyst, aka IncomeSharks, warns his followers from investing in DOGE at this stage. He believes that the price is getting close to a strong resistance zone, and the sell-off risks are too high at this stage.
Meanwhile, the technical indicators also paint a grave picture for DOGE. Thus, TD Sequential indicator sends a sell signal in the form of a green nine candlestick on the 4-hour chart. If the bearish formation is confirmed, DOGE may continue the correction for one to four red candlesticks with the first bearish target at $0.0044. This area stopped the recovery at the end of November and triggered the sell-off to $0.003.
DOGE, 4-hour chart
A sustainable move below $0.044 will open up the way to the next local barrier of $0.036 reinforced by 4-hour EMA50. The ultimate bearish target is $0.03.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.