Dogecoin DOGE/USD was sliding over 5% lower during Monday’s 24-hour trading session, desperately trying to hold above the 200-day simple moving average (SMA) on the daily chart, which the crypto regained following news that Elon Musk’s Twitter acquisition would close.
The bears briefly dropped the crypto under the important level on Monday afternoon, but bulls came in and bought the dip.
The 200-day SMA is an important bellwether. Technical traders and investors consider a stock trading above the level on the daily chart to be in a bull cycle, whereas a stock trading under the 200-day SMA is considered to be in a bear cycle.
The 50-day SMA also plays an important role in technical analysis, especially when paired with the 200-day. When the 50-day SMA crosses below the 200-day SMA, a death cross occurs, whereas when the 50-day SMA crosses above the 200-day, a bullish golden cross takes place.
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The Dogecoin Chart: A stock or crypto is unlikely to bust up through or break down under the 200-day SMA on the first try, but the more times the area is tested, the weaker it becomes. Bullish traders will want to see Dogecoin close above the level, with a lower wick, which could indicate a bounce is on the horizon for Tuesday.
- If Dogecoin closes under the 200-day SMA, the stock will also print a bearish Marubozu candlestick, which could indicate lower prices are on the horizon. If that happens, the 200-day SMA is likely to act as heavy resistance on the next bounce.
- A golden cross formed on Dogecoin’s chart on Nov. 11, which indicated a bull cycle could be on the horizon. If Dogecoin falls under the 200-day SMA, a death cross is likely to eventually form, which could indicate a bear cycle is in play.
- Dogecoin has resistance above at $0.075 and $0.083 and support below at $0.065 and at 6 cents.
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