Decision Time: A Look At Dogecoin Heading Into The Month Of August
Dogecoin DOGE/USD was trading flat during Monday’s 24-hour trading session, printing a double inside bar pattern in continued consolidation.
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 chart 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.
Bullish traders will want to search for inside bar patterns on stocks that are in an uptrend. Some traders may take a position during the inside bar prior to the break while other aggressive traders will take a position after the break of the pattern.
For bearish traders, finding an inside bar pattern on a stock that’s in a downtrend will be key. Like bullish traders, bears have two options of where to take a position to play the break of the pattern. For bearish traders, the pattern is invalidated if the stock rises above the highest range of the mother candle.
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The Dogecoin Chart: Dogecoin was working to print a double inside bar pattern, with all of Monday and Sunday’s trading taking place within Saturday’s mother candle. Traders can watch for a break up or down from the pattern later on Monday or on Tuesday to gauge future direction.
- Dogecoin has been trading above and ascending trendline since June 18, with the area acting as a key support area. Although Dogecoin has made a series of lower highs above the trendline, the area has caused Dogecoin to form a series of higher lows, which has helped the crypto avoid a downtrend.
- Dogecoin could be forming a bull flag pattern on the daily chart, with the pole created between July 26 and July 30 and the flag printing over the 24-hour trading sessions that have followed. The bull flag pattern isn’t dependable, however, because each of the candlesticks within the flag have long upper wicks.
- Dogecoin is trading above the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending above the 21-day, both of which are bullish indicators. Bulls will want to see the crypto hold above the moving averages to avoid negating the bull flag.
- Dogecoin has resistance above at $0.083 and just below the 10-cent mark. There’s support below at $0.065 and $0.057.