A pattern in Dogecoin’s price reminiscent of its early 2021 surge appears to be unfolding once again.
The weekly price averages of DOGE indicate a potential bullish formation known as a “golden cross.” This pattern, observed in early January 2021, preceded an astonishing 8,000% price surge.
With a market capitalization of approximately $22 billion, Dogecoin has shown remarkable performance this year, boasting a price surge of over 70%. This surge significantly outpaced the near 50% increase seen in Bitcoin, the largest cryptocurrency.
The 50-week simple moving average (SMA) of Dogecoin’s spot price is currently trending upwards and appears likely to cross above the 200-week SMA in the coming weeks, signaling a golden cross. This suggests that short-term price momentum may soon surpass long-term momentum, potentially ushering in a sustained bullish trend.
Momentum traders often utilize moving-average crossovers as part of a systematic approach to identifying market entry and exit points.
In March, the price of Dogecoin surpassed its 200-week SMA, breaking out of a prolonged sideways consolidation phase and establishing a solid position above this critical average.
If the anticipated golden cross materializes, it would mark the first occurrence in over three years. The previous golden cross, witnessed in early January 2021, preceded a four-month rally that propelled prices up over 8,000% to a record high of 76 cents on Binance.
However, it’s important to note that past performance does not guarantee future results, especially concerning moving average crossovers, which often lag behind price movements and can sometimes lead traders astray in traditional markets.
Moreover, meme coins like Dogecoin lack real-world utility and are primarily driven by speculation, rendering them highly sensitive to fiat liquidity conditions and global interest rate expectations.
During Dogecoin’s surge in early 2021, interest rates worldwide were near or below zero, fostering unprecedented risk-taking behavior across financial markets. However, the current landscape differs, with interest rates in the United States, the world’s largest economy, at multiyear highs exceeding 5%.
