Dogecoin Shows Strength As Bitcoin, Ethereum Struggle To Gain Momentum: A Look At The Cryptos Into The Weekend
Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) pumped higher during Friday’s 24-hour trading session, attempting to break up from an inside bar pattern, while the SPDR S&P 500 consolidated flat.
Like Bitcoin and Ethereum, Dogecoin (CRYPTO: DOGE) broke up from its inside bar pattern and was showing comparative strength, holding well above the top of Wednesday’s range.
An inside bar pattern indicates a period of consolidation and is usually followed by a continuation move in the direction of the current trend.
An inside bar pattern has more validity on larger time frames (four-hour charts or larger). The pattern has a minimum of two candlesticks and consists of a mother bar (the first candlestick in the pattern) followed by one or more subsequent candles. The subsequent candle(s) must be completely inside the range of the mother bar, and each is called an “inside bar.”
A double, or triple inside bar can be more powerful than a single inside bar. After the break of an inside bar pattern, traders want to watch for high volume for confirmation the pattern was recognized.
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The Bitcoin and Ethereum Charts: Bitcoin and Ethereum created an inside bar pattern on Wednesday and Thursday, and on Friday the cryptos were attempting to break up from the patterns but were rejecting heavy resistance above. A lack of volume was contributing to weakness in the move, which may indicate further consolidation is needed, at least on smaller timeframes.
The consolidation on Bitcoin and Ethereum, which has taken place since Nov. 10, has helped to drop their relative strength index (RSI) down from overbought territory to under the 70% level. This indicates that Bitcoin and Ethereum could eventually rally further north if bullish volume continues to power the cryptos.
Bullish traders want to see big bullish volume come in and break Bitcoin and Ethereum up above Friday’s new high-of-day, which could accelerate upside momentum. Bearish traders want to see big bearish volume come in and drop Bitcoin and Ethereum down under the eight-day exponential moving average (EMA), which would negate the current upward trend.
Bitcoin has resistance above at $38,105 and at $39,600 and support below at $35,593 and at $31,862.
Ethereum has resistance above at $2,140 and at $2,317 and support below at $2,020 and at $1,937.
The Dogecoin Chart: Although Dogecoin has been trading in a downtrend since Nov. 18, making a series of lower highs and lower lows, the crypto’s recent surge higher from the 7-cent mark indicates a trend change may be on the horizon. Bullish traders want to see the crypto retrace over the next few days to form a higher low above the Nov. 21 low-of-day.
If Dogecoin closes Friday’s 24-hour trading session near its high-of-day price, the crypto will form a bullish Marubozu candlestick, which could indicate higher prices will come again on Saturday. When the crypto eventually prints a reversal candlestick, such as a doji or shooting star candlestick, it could indicate the local top has occurred.
Bearish traders want to see Dogecoin fall under the eight-day EMA, which could indicate the downtrend will continue and the local top has formed.
Dogecoin has resistance above at $0.083 and at 9 cents and support below at $0.075 and at the 7-cent mark.
Read Next: Dogecoin To The Moon? Analyst Signals Potential Surge In DOGE Amidst $100K+ Transactions Spike
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