Dogecoin has now made its way through a trend reversal, after its sharp rise and pullback in the back half of October and first half of November. In October, (CRYPTO: DOGE) began a massive rally, gaining over +150% in just five days. About half of these gains have been given up now as some traders booked their profits. In the middle of November, Dogecoin experienced a period of consolidation between $0.0742 and $0.0900 creating a double bottom at the same time, giving the first possible signal that the coin was ready for a trend switch.
The trend reversal was confirmed by the Fisher Transform Indicator on the daily timeframe. A crossover between the indicators signal lines can be witnessed after it created support at $0.0745. Since then, we have seen the price move to the upside, breaking above $0.0900, a previously strong resistance.
Looking at the current price action at the start of the week, DOGE may be in a new area of consolidation and trying to break the resistance at $0.1070. Looking back at the Fisher Transform, we can see that it is again indicating a crossover signal, which may hint that DOGE is posed for an upside breakout. If the price successfully breaks the resistance at $0.1070 and manages to close above the daily chart, the next price target to watch includes $0.1420 if the momentum is strong enough.
Besides the technical side of Dogecoin, it might pay to keep an eye on news emanating from Elon Musk by way of Twitter. Speculation has been rife that Musk will announce that the social media platform that he recently acquired will adopt Dogecoin as some form of payment method. Last week, Musk shared slides from a presentation he gave to the Twitter leadership team detailing his version for ‘Twitter 2.0’. Included in the presentation were slides related to ‘payments’, opening speculation that Musk may be wanting to form some kind of integration with his favourite cryptocurrency.