Benzinga
Published May 24, 2022 20:31
Updated May 24, 2022 21:10
Does This Pattern Spell Trouble For Dogecoin Traders Or Will Its Defenders Hold This Line?
Dogecoin (CRYPTO: DOGE) was trading mostly flat on Tuesday in a generally sideways trading pattern that has plagued traders and investors since May 13 and sucked the enthusiasm out of traders who are used to playing the crypto’s more-usual volatility.
Unfortunately, when Dogecoin fell to its low-of-day at the 8-cent mark, the crypto formed a lower low on the chart, which indicates the downtrend is still intact.
A downtrend occurs when a stock consistently makes a series of lower lows and lower highs on the chart.
The lower lows indicate the bears are in control, while the intermittent lower highs indicate consolidation periods.
Traders can use moving averages to help identify a downtrend, with descending lower timeframe moving averages (such as the eight-day or 21-day exponential moving averages) indicating the stock is in a steep shorter-term downtrend and descending longer-term moving averages (such as the 200-day simple moving average) indicating a long-term downtrend.
A stock often signals when the lower low is in by printing a reversal candlestick such as a doji, bullish engulfing or hammer candlestick. Likewise, the lower high could be signaled when a doji, gravestone or dragonfly candlestick is printed. Moreover, the lower lows and lower highs often take place at resistance and support levels.
In a downtrend the "trend is your friend" until it’s not and in a downtrend, there are ways for both bullish and bearish traders to participate in the stock:
The Dogecoin Chart: Dogecoin’s most recent lower high was printed at the $0.088 level on Monday, and the most recent confirmed lower low was printed on May 19 at $0.081. Even though Dogecoin printed a lower low on Tuesday, the crypto didn’t receive much in terms of momentum, which caused bullish traders to buy the dip.
See Also: Dogecoin Daily: Price Slumps Again, Declining Trader Sentiment And More
Photo: Created with an image from Orde Saunders on Flickr
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Read at Benzinga
Read the original article on Benzinga
Written By: Benzinga
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.