- Dogecoin price quietly rests below a multi-month rising trend line that began at the end of January.
- DOGE/USD flashes the first negative correlation with BTC/USD since November 2020.
- Meme token on course to close below the 10-week simple moving average (SMA) for the first time since October 2020.
Dogecoin price has been holding the January rising trend line and the 10-week SMA throughout 2021, despite the noteworthy corrections. Since April, the token-specific price tendencies of DOGE have negatively correlated with BTC on the weekly chart. However, the last time there was a negative correlation, it was followed by a remarkable DOGE rally of 2,800%. Can we expect such an advance again?
Dogecoin price may close today with another inside week
Dogecoin price looked primed for a new rally to the all-time high on June 4 after consecutive days of double-digit returns that propped DOGE on top of the rising 50-day SMA. It ended a multi-week descending channel.
Like May, Dogecoin price turned lower again in June within the confines of a new descending channel that has carried DOGE below the January rising trend line and the important 10-week SMA, a moving average the digital asset has held since October 2020. Thus, dogecoin price is in a technically precarious position.
However, it is interesting to note that the DOGE/USD pair is flashing a negative correlation with the BTC/USD pair on the weekly chart for the first time since November 2020. Once the negative correlation turned positive in November 2020, DOGE went on to gain 2,800%. It could signal bountiful returns for Dogecoin price in the months ahead.
The negative correlation lasted about four weeks in November 2020. Based on that precedent, the current negative correlation could extend another two to three weeks before a flip to a positive correlation.
Yes, it is a sample size of 1, and the negative correlation could flip positive quickly if Bitcoin turns south again. Nevertheless, it cannot be ignored as the cryptocurrency and the cryptocurrency complex rest at a pivotal moment.
DOGE/USD weekly chart
On the downside, a close below $0.295 may unleash a new wave of heavy selling that would target the May 19 low of $0.195, communicating a 30% loss from the current price.
Unless a significant wave of buying pressure overtakes Dogecoin price, the digital token will close today below the trend line and 10-week SMA. Yet, the official change in trend does not guarantee significant losses moving forward as the negative correlation with BTC could tell that higher prices are only a few weeks away if the 2020 precedent repeats.
Dogecoin price primed to retrace
In the following video, FXStreet's analysts evaluate where Dogecoin price could be heading next as DOGE forms a reversal pattern.
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.
Recommended Content
Editors’ Picks
Bitcoin reaches new highs near $90,000, on-chain data show chances of pullback
Bitcoin hit a new all-time high of $89,900 on Tuesday before easing to around $86,000, following a 30% surge since November 5. Technical indicators suggest the rally may be overstretched, with a potential corrective pullback ahead.
GIGA investor loses $6M to phishing scam via fake Zoom link
On Monday, a Gigachad (GIGA) investor lost $6.09 million due to a phishing attack involving a fake Zoom link. Crypto investigation firm Scam Sniffer declared the scam that led the victim to a malicious site, compromising their wallet.
Tron, Avalanche and Uniswap: Double-digit gains on the cards, technical indicators show
Tron is breaking above an ascending triangle formation on Tuesday, signaling a potential rally continuation. While AVAX and UNI are retesting their crucial support level — if supported, this suggests an upside move — all three altcoins look poised for double-digit gains as the crypto rally continues.
BNB: Bullish technical pattern validated, eyes all-time high
Binance Coin trades slightly down on Tuesday after breaking above an ascending triangle formation on the weekly chart, following a 12.5% rally last week. The technical outlook suggests a bullish breakout pattern and continuation of the rally, with a target set for a new all-time high of $825.
Bitcoin: Further upside likely after hitting new all-time high
Bitcoin hit a fresh high of $76,849 on Thursday as crypto-friendly candidate Donald Trump won the US presidential election. Institutional demand returned with the highest single-day inflow on Thursday since the ETFs’ launch in January.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.