A Look at Dogecoin After Fed Rate Hike Boosts S&P 500, Crypto Sector Follows Suit
Dogecoin DOGE/USD fell nearly 2% during Friday’s 24-hour trading session after climbing nearly 14% between Tuesday and Thursday.
The cryptocurrency sector as a whole has been struggling since November 2021 amid soaring inflation, rising interest rates and fears of an impending recession. The crypto sector is considered high risk and traders and investors are likely deciding to bet less on “lotto style” trades or wait for the tides to turn and a new bull cycle to be confirmed.
On Wednesday, the Federal Reserve raised its target rate by 0.75% after raising rates by the same amount in June. At the press conference following the decision, Fed Chairman Jerome Powell took a dovish tone, saying he doesn’t believe the United States is in a recession because of the strength of the labor market.
The S&P500 surged 1.83% on the day to close above the psychologically important $4,000 level, and Bitcoin BTC/USD, Ethereum ETH/USD and many other coins and tokens soared in tandem.
Dogecoin followed suit, enjoying a bullish day, and continued momentum on Thursday caused the crypto to close slightly below the 7 cent level. Dogecoin’s candle in Friday’s session seems to indicate that the crypto could be printing a bearish reversal candlestick and bullish traders will want to see Dogecoin trading higher over the weekend to avoid confirming a downtrend. .
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The Dogecoin chart: On Friday, Dogecoin appeared to be printing a shooting star candlestick on the daily chart, which could indicate that lower prices will occur in Saturday’s trading session. If this happens, Friday’s daily high will confirm as a higher low, reversing the uptrend the crypto reversed into on July 13th.
If Dogecoin drops lower over the weekend, the crypto may find support at a lower ascending trendline, which Dogecoin has been trading above since June 18. The crypto has tested the trendline as support five times since then and bounced off the zone each time.
Although Dogecoin is not trading much lower, the lower prices come on above average volume, which rules out consolidation as a reason for the drop. Instead, it looks like the bulls and bears are in a fierce battle for control of the future direction. At press time, Dogecoin volume on Coinbase measured around 325 million compared to the 10-day average of 254.4 million.
Dogecoin is trading above the 8-day and 21-day exponential moving averages (EMA), with the 8-day EMA trending above the 21-day, both of which are bullish indicators. The crypto is also trading above the 50-day simple moving average (SMA), indicating that longer-term sentiment is bullish.
It should be noted that Dogecoin is trading around 40% below the 200-day SMA, with the 50-day SMA trending below 200-days, indicating that the crypto is still in a bearish cycle as the winter crypto is raging.
Dogecoin has resistance above $0.083 and just below the 10 cent mark and support below at $0.065 and $0.057.
See also: Dogecoin Daily: Price intact despite recession talk, what the co-founder has to say