Dogecoin price rests at an inflection point for the bull market
- Dogecoin price staring at consecutive closes below the 50-day simple moving average (SMA) since November 2020.
- Daily volume has not closed above average since February 10.
- Squeeze formation puts DOGE traders on alert.
Dogecoin price holds a neutral bias for traders
DOGE is set to close today with a squeeze formation confirmation, and it may be the catalyst that shakes the bulls or bears from hibernation. The formation comes at a time when the altcoin will close below the 50-day SMA for the second day in a row, something that has not occurred since November 1-2, 2020.
In early March, the last squeeze formation generated a 30% spike over four days, including a one-day gain of 22% on March 8.
If the squeeze formation resolves to the upside, the first important resistance is the upper Bollinger and Keltner bands at $0.640. A daily close above the resistance will raise the odds that the rally will reach the 0.618 Fibonacci retracement level of the February crash at $0.074.
The clustering of long wicks above $0.080 in early February warns traders not to get too greedy and lock in profits. New all-time highs will have to wait for some months.
DOGE/USD daily chart
With Dogecoin price set to close below the 50-day SMA around $0.056 at the time of writing, SMA traders should be ready for a potential decline to the lower Bollinger and Keltner bands at $0.048. The next credible support is at the 0.618 retracement level of the bull market beginning November 2020 at $0.039. Further weakness will lead to panic and will likely erase a significant portion of the social media-driven gains.