Yerevan (CoinChapter.com) — Dogecoin (DOGE), the prominent meme cryptocurrency, is on the verge of logging a bullish breakout move towards an all-time high of $0.50.
The DOGE/USD exchange rate pared its losses after staying in a week-long bearish trend. The pair was trading for $0.31 in the early London session Thursday after recovering by roughly 24 percent in the previous session. Its gains followed a tweet from Tesla and SpaceX founder Elon Musk.
The billionaire entrepreneur, known for its recent history of supporting Dogecoin, called himself the “Dogefather.” prompting traders to increase their bids on DOGE/USD. It is common for Dogecoin.
The prospect of Dogecoin prices hitting $0.50 increased as it confirmed a bullish continuation pattern on its one-day charts. Dubbed as Descending Triangle, as shown in the chart below, the pattern occurs when an asset declines after a bullish move.
In retrospect, Descending Triangles represent right-angled triangles, with a horizontal support line keeping the asset from falling any further, and a falling trendline that caps its upside attempts. The price mostly trades inside the Triangle region, until it breaks above the falling trendline. Then, it tends to rise by as much as the maximum height between the Triangle’s upper trendline and lower trendline.
Dogecoin almost checks all the boxes that qualifies it to be in a Descending Triangle pattern. That said, it could eye a bullish continutaion move in the coming sessions. The maximum Triangle height is roughly $0.22. That puts DOGE/USD en route to approximately $0.50.
Fundamentals Behind Dogecoin
There are none, to begin with, except Mr. Musk’s relentless support of the joke token.
It is not clear if the Tesla chief holds Dogecoin, or if he is simply troll-promoting it. However, his carmaking firm has become highly dependent on cryptocurrencies, and Bitcoin in particular. Tesla’s quarterly earnings report shows that Bitcoin has helped it escape losses narrowly. It sold 10 percent of its $1.5 billion BTC holdings to secure a $101 million profit.
Mr. Musk later tweeted that Tesla went ahead with the sale to prove that Bitcoin is a liquid asset.
Fun as it may be to watch, Dogecoin makes a risky investment, even in the short term. Traders should proceed with caution when it comes to cryptocurrencies without a fundamental basis. However, judging by the technical indicators and extreme hype, DOGE supporters might have something to celebrate in the upcoming weeks.