Dogecoin (CRYPTO: DOGE) It traded down nearly 4% on Friday afternoon in sympathy with the group leader. Bitcoin (CRYPTO: BTC), which is down another 3%. Much of the cryptocurrency market has been in a confirmed downtrend since November and the change in the calendar year to 2022 hasn’t done anything to alter the price action.
The crypto sector is nothing if not volatile, although during 2021 there were several times Bitcoin and Ethereum began trading alongside well-established public markets. Individual cryptocurrency whales can also significantly influence prices by buying and selling large amounts at once and by moving their positions between different wallets.
Co-create Dogecoin Billy Marcus took to Twitter Thursday to offer his own interpretation of why cryptocurrency prices have risen and fallen when he wrote, “The most common reason for a cryptocurrency to fall is its fall/The most common reason for a cryptocurrency to go up is its bullishness/panic and fomo’s control of the field.”
There is truth in his statement, though, that the idea is not specific to the cryptocurrency market because both “FOMO” (fear of missing out) and fear itself can also accelerate price movements in individual stocks and in general markets.
When the price of a cryptocurrency or a stock fluctuates, no matter how large, technical analysts often find that prices are still sticking to chart patterns and levels of resistance and support. Although Dogecoin fell further on Friday, the cryptocurrency held onto its chart by holding above the psychological support level at $0.15.
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Dogecoin chart: Dogecoin has fallen below the 15-cent level three times since December 4 and each time the crypto rises above the level, indicating that there are buyers buying the dip below that level. On Friday, Dogecoin was printing another hammer candle as it did on Wednesday, indicating a possible inside bar or price rally on Saturday.
- The Dogecoin RSI is approaching the 30% level, which indicates that the cryptocurrency has entered the oversold territory, which could be a buy signal for technical traders.
- Bulls may want to be wary of Dogecoin moving lower in above-average volumes, as this indicates that the bears are still in control. As of mid-afternoon on Friday, Dogecoin had a volume of over 274 million compared to the 10-day average volume of 182 million.
- The 8-day exponential moving average (EMA) is steering Dogecoin lower and the bulls’ first course of action would be to recover this level as support.
- Dogecoin has higher resistance at the 16 cents mark, the $0.176 mark, and support below the $0.15 mark, the 13 cents mark.
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