Yerevan (CoinChapter.com) — Dogecoin (DOGE) is at $0.27, recovering from a 64 percent crash ending April 20. And so it appears, the fundamentally starved cryptocurrency token is relying on a technical indicator to hold its overall bullish bias.
Dubbed as a 20-day exponential moving average (20-DMA; the blue wave in the chart below), the wave has served as the latest bullish reversal juncture for Dogecoin. The support curve comes with a recent history of limiting or entirely reversing the token’s bearish bias. On Monday and late last week, it held Dogecoin from falling into what appears to be a crash
As the chart shows, whenever DOGE/USD starts approaching the 20-day EMA line, it re-activates bullish sentiment. Traders flock into the Dogecoin market to accumulate the currency or open fresh long positions. That eventually boosts its value.
So as the 20-DMA wave keeps going up, the price strives to float above it. It acts as a short-term price floor for Dogecoin’s downside price corrections. However, if the price drops below the line, traders tend to switch their short-term bias from bullish to bearish, dropping the price even lower.
What Keeps Dogecoin Afloat?
Dogecoin is a cryptocurrency that’s sustained mainly by the army of online supporters. They create hype on social media, raising its value. As it has no stable development team and technological basis, the token is highly volatile.
The Dogecoin price spikes have been mainly due to the select few famous proponents’ tweets in the past. One of them is the CEO of Tesla, Elon Musk, who is avidly tweeting about DOGE. Another big supporter of the meme-token is Mark Cuban, the owner of Dallas Mavericks. He went as far as to add Dogecoin to Mav’s balance sheets.
On the other hand, the meme cryptocurrency continues to become a criticism among many crypto experts. The latest prediction comes from Charles Hoskinson, the co-founder of Ethereum and the founder of Cardano.
He called DOGE a “worthless cryptocurrency” during an ask-me-anything session last week. Hoskinson also warned about the instability Dogecoin brings to the crypto market in general, stating that if the DOGE bubble bursts, Mr. Musk will partially own the blame because of the hype he creates on Twitter.
“(Elon) Musk keeps posting and posting and posting, and he really seems to enjoy doing it. But everything that goes up goes down, and our industry will be worse because of it,”the mathematician added.
Proponents of Dogecoin are surely delighted by its bullish bias, which leads to the growing ranks of supporters. Meanwhile, the warnings of Dogecoin bubble bursting are indicative of the extreme volatility of this token, making it a high-risk investment.
Image by Sasin Tipchai from Pixabay