Dogecoin Appears Headed for a ‘Golden Cross’

DOGE’s weekly price averages appear to be on track to confirm an upward golden cross.

The previous golden cross seen in early January 2021 heralded an 8,000% price increase.

Dogecoin {{DOGE}}, the world’s largest meme cryptocurrency by market cap, appears to be heading for a repeat of the bullish “golden cross” technical pattern that foreshadowed the early 2021 rally.

DOGE, which has a market cap of approximately $22 billion, has been on a phenomenal run this year, with a price increase of over 70% this year, according to CoinDesk, significantly outpacing the almost 50% increase in the largest cryptocurrency, bitcoin {{BTC}}. performed. data.

The 50-week simple moving average (SMA) of the Meme token’s spot price is currently trending northward and is likely to cross above the 200-week SMA in the coming weeks, confirming the golden cross. In other words, short-term price momentum can quickly outpace long-term momentum and potentially turn into a long-term uptrend.

Momentum traders often use moving average crossovers as part of a structured approach to determine market entry and exit points.

The 50-week SMA is heading north and looks set to move above the 200-week SMA, confirming the golden cross in the coming weeks. (Trading View)

DOGE price broke out of a long-term sideways consolidation by reaching the top of the 200-week SMA in March and has since established itself above the critical average.

The upcoming golden cross will be the first in more than three years. The previous event, seen in early January 2021, heralded a four-month rally in which prices rose over 8,000% to a record 76 cents on Binance.

However, historical data does not promise future results. This is especially true for moving average crossovers, which tend to lag prices and have been known to rub investors the wrong way in traditional markets.

Additionally, meme coins like DOGE have no real-world use cases and are mostly based on speculation, making them more sensitive to fiat liquidity conditions and global interest rate expectations.

During DOGE’s run in early 2021, interest rates were near or below zero globally, catalyzing unprecedented risk-taking in every corner of the financial market. This is no longer the case; In the United States, the world’s largest economy, rates are at multi-year highs above 5%.

Read: Is 2020 a Restart for Dogecoin?

CORRECTION (08:52 UTC): Corrects the third paragraph stating that the 50-week SMA will move above the 200-week SMA, not the 200-day SMA.