Dogecoin is approaching a golden cross: what does it mean for traders?
Dogecoin is down 1.9% today at $0.145, but its weekly performance remains positive: Dogecoin is up 5% in the past seven days. If we zoom out, this uptrend is still in place despite the correction experienced in the past four days.
If we look more closely, there are more reasons for optimism: the 50-week simple moving average (SMA) of the coin’s spot price is currently rising, and if things continue in this direction, it could cross the 200-week SMA in the coming weeks.
Such a crossover would form a golden cross – something that has not happened to Dogecoin since the beginning of 2021. That was before Dogecoin started its massive run, setting new highs just four months later.
In short, the formation of a golden cross means that new buyers are getting their gains faster than long-term holders (who had to endure the slow performance in the previous days). For traders, this signals a potential bullish market trend and is often interpreted as a strong buy signal, marking the end of a bearish trend and the beginning of a bullish phase.
But most people know what happened next: after the big rise, a 90% drop occurred in the following months. Subsequently, from May 2022 to February 2024, Dogecoin stabilized between $0.05 and $0.10.
So what does all this mean? Although this is how traders interpret such data and may often use it to help guide their decisions and behavior, it does not mean that this will happen again.
After all, the golden cross is just one of many indicators that traders pay attention to, and cautious investors will consider risk management strategies and other factors. Perhaps most importantly, the entire market is in a completely different situation in 2021. Macroeconomic conditions have changed, and geopolitical turmoil has market participants currently panicking. In a word, the spring of Dogecoin will definitely come, let us wait and see, and more high-quality targets are currently ready for layout, welcome to join
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