Dogecoin (CRYPTO: DOGE) was consolidating sideways on Wednesday in a continuation pattern Benzinga called out on Monday.
The crypto ran 28.8% higher between Feb. 3 and Feb. 7, which made Dogecoin due for consolidation in order to cool down its relative strength index (RSI).
The crypto market has taken a swing higher over recent weeks, with Bitcoin (CRYPTO: BTC) gaining 35% off its Jan. 24 low of $32,933.33 and Ethereum (CRYPTO: ETH) rebounding a massive 51% off the low of $2,150.54 it hit on that same date.
A break in Dogecoin’s current pattern could come as soon as Thursday because the crypto has developed into three possible bullish chart patterns, although the apex cryptocurrencies, which sometimes trade in tandem with the general markets, will have to cooperate for that to happen.
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The Dogecoin Chart: Dogecoin is trading in three possible bullish patterns on the daily chart, with the first being a cup-and handle, the second a bull flag pattern and lastly a triple inside bar pattern. Because all three bullish chart patterns align, the move higher could be explosive if the patterns are recognized.
Dogecoin’s cup-and-handle pattern has the cup formed between Jan. 15 and Feb. 7, with the handle of the pattern being created in the days that have followed. The measured move, if the pattern is recognized, is 38%, which indicates Dogecoin could reach the 20-cent level on a break from the pattern.
The crypto is also trading in a bull flag pattern, with the pole created between Feb. 3 and Feb. 7 and the flag formed over the days that have followed. If that pattern is recognized, the measured move is 28%, which indicates the crypto could hit the 19-cent level.
Dogecoin has also formed into a triple inside bar pattern, with the mother bar printed on Monday and the inside bars on Tuesday and Wednesday. The pattern leans bullish because the crypto was trading higher before forming it. Traders can watch for a break of the pattern later on Wednesday or on Thursday to gauge future direction.
The consolidation has helped to cool Dogecoin’s RSI down slightly from the 60% level. This will allow the crypto to run higher if the bulls come in and take control without Dogecoin becoming overbought.
Dogecoin is trading above the eight-day and 21-day exponential moving averages (EMAs) and on Feb. 7 the eight-day EMA crossed above the 21-day, which is bullish. On Wednesday, the crypto regained the 50-day simple moving average as support, which indicates longer-term sentiment has flipped bullish.
Dogecoin has resistance above at $0.16 and $0.176 and support below at $0.146 and $0.135.
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Photo: Courtesy of CryptoWallet.com Image on Flickr
