Dogecoin Shows Strong Signs of an Upcoming Price Surge

Dogecoin Shows Strong Signs of an Upcoming Price Surge

Cryptocurrency world's biggest meme coin, DOGE, is exhibiting a promising technical formation known as the "golden cross" in its weekly price averages. The last golden cross, observed in January 2021, preceded an impressive price increase of 8,000%.

Golden Cross Formation in Dogecoin

The reformation towards the golden cross, which accurately predicted the rise in early 2021, has excited DOGE investors. With a market value of approximately $22 billion, DOGE has outperformed Bitcoin by a significant margin this year, with a price increase of over 70% compared to Bitcoin's approximate 50% rise.

Dogecoin's spot price is currently trending upwards in its 50-week simple moving average (SMA). It is anticipated that DOGE will cross above its 200-day moving average in the coming weeks, completing the formation of the golden cross. This technical indicator suggests that the short-term price momentum is likely to surpass the long-term momentum, potentially leading to a sustained upward trend.

Investors' Interest

Investors following this momentum often rely on moving average crossovers to determine optimal entry and exit points in the market. This method, employed as part of a strategic approach, facilitates clearer trend assessment and informed decision-making.

Historical Precedent

In March, DOGE's price surpassed the 200-week SMA, breaking out of a prolonged period of consolidation. Since then, it has established robust support above this crucial average. The upcoming golden cross will be the first observed in over three years. Notably, the previous golden cross was followed by a four-month rally in January 2021, during which prices soared over 8,000% to a record high of 76 cents on Binance.

Cautions

While historical performance provides insights, it is not an absolute guarantee of future outcomes. Meme coins like DOGE, which lack tangible real-world applications, are primarily driven by speculation. As a result, they are highly susceptible to liquidity conditions in fiat currencies and global interest rate expectations.

During DOGE's 2021 surge, global interest rates were near or below zero, fostering unprecedented risk-taking in financial markets. However, major economies such as the USA are currently experiencing the highest interest rate levels in recent years. This could potentially impact assets like DOGE.