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Dogecoin

Dogecoin price trapped in a tight range, despite the DOGE wiener craze

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  • Dogecoin price is being pressed down by the weight of the 50-day simple moving average (SMA). 
  • DOGE may close today with the biggest gain since the July 21 breakout from the May descending trend line.
  • Oscar Mayer taps the Dogecoin fever with a limited edition pack of Hot Doge Wieners.

Dogecoin price action has been uneventful since the July 21 breakout, offering few clues about directional intentions. The lack of volatility has resulted in several doji candlestick patterns on the daily charts, signifying that DOGE speculators are uncertain and reluctant to accumulate the meme token despite the booming returns for Ethereum and Bitcoin. Thus, with no sustainable bid, Dogecoin is vulnerable to a break to the downside if the cryptocurrency complex is hit with selling pressure.

Dogecoin enthusiasts have the opportunity for a DOGE hot dog

Oscar Mayer, the famous brand for wieners, announced on August 4 that it has a “limited-edition pack of Hot Doge Wieners” with a cash value of 10,000 Dogecoins, which equates to around USD 2,050 at the current price. To amp up the interest, Oscar Mayer produced only one pack that was put up for bid on eBay at a starting bid of USD 0.99.

The public response was overwhelming, breaking the eBay link and pushing the bid up to $3,450 later in the day.

Oscar Mayer is not the first consumer company to indulge the Dogecoin mania. In July, AXE created a limited supply of ‘Dogecans’ that were sold out immediately. Similarly, Slim Jim generated a significant jump in customer interactions after launching a dogecoin-focused marketing strategy earlier this year.

The excitement over the Hot Doge Wieners did not positively impact Dogecoin price as DOGE is up 0.90% for the week.

Dogecoin price needs a bigger catalyst  

The disinterest, indecision or fear that has defined Dogecoin price action over the last 17 days has compressed the Bollinger Bands to the tightest range since the period preceding the explosive April rally. It does not predict a continuation of the doddering DOGE rally, but it does hint of a substantial move shortly.

Adding to the limited volatility is the ongoing convergence of the 50-day SMA at $0.217 with the 200-day SMA at $0.197, thereby establishing pivot prices for future DOGE investment decisions.

A daily close below the intersection of the 200-day SMA at $0.197 with the May 19 low of $0.195 would be the first confirmation of a bearish resolution from the trendless Dogecoin price action. It would immediately position DOGE for a quick drop to the July 20 low of $0.159 and potentially the June 22 low of $0.152. If Dogecoin price does not attract a bid at the June 22 low, the altcoin will drop to the April 23 low of $0.135, logging a 30% decline from the May 19 low.

DOGE/USD daily chart

DOGE/USD daily chart

Alternatively, if Dogecoin price claims the 50-day SMA at $0.217 on a daily closing basis, it would project a bullish DOGE narrative that will include a test of the June 25 high of $0.291, representing a 34% profit for timely speculators. The only resistance of importance before the June 25 high is the July 26 high of $0.242. 

A bullish cryptocurrency complex and a new Oscar Mayer market strategy built around Dogecoin has not unlocked Dogecoin price from the trendless action that has dominated since July 22. The passive trading has the technicals pointing to lower prices, but for now, patience is the only investment tactic that will work with DOGE. 

Here, FXStreet’s analysts evaluate where DOGE could be heading next as it seems bound to retrace before rising.

 



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Dogecoin

Trading Range Getting Extremely Tight for Dogecoin – Breakout in DOGE/USD Soon?

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Dogecoin turned extremely bullish for about a month in April and May, surging from around $0.05 until $0.74. That was very impressive for this new cryptocurrency, which brought to life the Shiba Inu coin as a response to Dogecoin. Although, since May 8, the situation in Dogecoin has been very disappointing and depressing for buyers.

DOGE/USD reversed down in the second week of May, although this cryptocurrency was finding some form of support at the 50 SMA (yellow) on the daily chart until the end of June and we saw a bounce from there. But, the 20 SMA (gray) which was providing support during the bullish trend in spring, now turned into resistance, confirming that the trend had shifted to bearish.

The bearish trend resumed after the rejection at the 20 daily SMA, and the 50 SMA and the 100 SMA (green) were broken. As a result, this cryptocurrency continued down, making lower lows in June and again in July. That showed that the situation in Dogecoin was really bad.

DOGE/USD

But the 200 SMA (purple) held as support on this time-frame chart despite being pierced, although we know that cryptos are very volatile, so don’t expect the price to respect these levels exactly to the pip. This moving average has been holding as support, while pushing the lows higher recently, but only marginally.

On the other hand, the highs have been getting lower as well, with the 50 SMA acting as resistance now and pushing the price down. So, the range is getting extremely tight for this DOGE/USD and a breakout is expected soon. The price action points to a bearish breakout, although if the sentiment in the crypto market continues to improve, we might see a surge higher as well. We might try to trade the breakout, selling if the 200 SMA gets broken or buying if the 50 SMA gets broken to the upside, which you can follow on our live forex signals page.



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Market & Analysis

3 reasons why Bitcoin can suddenly explode to a new $50K-$65K range

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A combination of multiple indicators tracking Bitcoin (BTC) blockchain would continue the benchmark cryptocurrency’s price rally further into 2021, popular on-chain analyst Willy Woo anticipates.

In his recent newsletter, the market researcher wrote that he expects Bitcoin prices to reach the $50,000-$65,000 range in the coming sessions. His comments appeared as BTC/USD reclaimed its three-month high above $42,600 only days after crashing below $30,000, the pair’s psychological support level.

“My expectation is similar to BTC at $20k all-time-high in January, where the price is pinned close to the $40k-$42k ceiling over a period of days (2 weeks maximum) wearing down sellers, followed by a faster move to $50k,” said Woo.

“The next major consolidation band is $50k-$65k.”

Bitcoin is rangebound between $30,000 and $40,000 since May 2021. Source: TradingView.com

BTC supply crunch

Bitcoin price rallied alongside supportive comments from Tesla’s Elon Musk, Twitter’s Jack Dorsey, and Ark Invest’s Cathie Wood in July. The cryptocurrency also rose on rumors that global retail giant Amazon would start accepting it as payments, a claim that the company later refuted.

Meanwhile, Bitcoin’s run-up to $42,600 also came right after Federal Reserve Chairman Jerome Powell admitted the possibility of interim inflationary shocks during a press conference last Wednesday. In detail, crypto bulls treat Bitcoin as their hedge against rising consumer prices.

Recommended: Bitcoin struggles at $40K after ‘most confusing’ Jerome Powell press conference

What’s noteworthy is that the period of Bitcoin’s price recovery from under $30,000 coincided with an increasing liquid supply shock. Specifically, BTC was taken off exchanges, which, as Woo suggested, was due to strong holders locking them away for long-term investment.

Bitcoin liquid supply shock oscillator. Source: Willy Woo

“As of today, the Liquid Supply Shock metric is at a level which is consistent with a $55K price level,” the analyst wrote on Aug. 1, pointing at the high deviation between the available supply and the current Bitcoin prices.

“Despite a powerful 44% rally in less than 2 weeks, we are still in a heavily discounted zone for BTC.”

Miners return

China’s ban on cryptocurrency activities in May played a crucial role in sending the Bitcoin prices lower this summer. The decision paralyzed the regional crypto mining industry that accounted for more than half of the global Bitcoin production.

Glassnode reported in June that miners either closed down their rigs to comply with the new law or shifted their operations outside China, thereby incurring additional costs to keep their production running.

The data analytics platform also noted that miners would likely liquidate a portion of their Bitcoin holdings to cover additional expenses. But, as it turned out, the miners’ net BTC accumulation trend reversed in May, showcasing capitulation.

But as Woo noted, miners resumed Bitcoin accumulation in July. He cited the popular Bitcoin Hash Ribbon metric, which tracks the network’s expansion and loss of hash rate, noting that it was recovering for the first time since the China ban.

Bitcoin hash ribbon vs. BTCUSD price action. Source: Willy Woo

“Ribbon recovery events spell the end of miners sell-off (which is what they do when they are driven out of business),” wrote Woo.

“Typically a recovery of the ribbon opens the way for a multi-month period of bullish price action. This indicator did a very good job of locating the price bottom.”

Whale activity spikes

The past week has seen strong buying from whales, added Woo while pointing at Bitcoin’s climb from $29,300 to over $42,600.

Whales typically represent entities that hold more than 1,000 BTC in their Bitcoin addresses. While they don’t exclusively impact the market’s directional bias, their buying in conjugation with relatively small Bitcoin investors points to a strongly bullish scenario.

Related: Bitcoin accumulation accelerates among ‘whales’ and ‘fish,’ while BTC rallies to $40K

The analyst noted that all investor cohorts—big or small—were buying Bitcoin for nine consecutive days, an even he has not witnessed in the cryptocurrency’s lifetime.

Whale-led Bitcoin buying typically follows up with large price spikes. Source: Willy Woo

“The present buying by all cohorts is strongly bullish,” said Woo. “When everyone is buying, who is the seller? The sellers are traders. The coins sold by traders reduce the speculative inventory on spot exchanges.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.