Here’s how to tell if dogecoin’s rebound is more bark than bite, according to technical analysts following the popular crypto.
On Friday afternoon, dogecoin prices DOGEUSD, +43.27% were changing hands at 56.5 cents, up over 40% on CoinDesk, and near the highs of the day, amid a powerful rebound for the meme asset that had skidded to a 24-hour low at 37.5 cents.
It isn’t clear if the current uptrend for doge represents a modest rebound or a more decisive shift in momentum, as the climb coincides with news that Coinbase Global will offer the crypto on its platform in about two months and comments from Elon Musk on Thursday, who claimed in a tweet that he was “working with Doge [developers] to improve system transaction efficiency.”
“Potentially promising.” Musk wrote.
To be sure, it isn’t clear which developers Musk would be working with. A Twitter account linked to one of the creators of the meme coin, which was kicked off in 2013 as a lighthearted riff on bitcoin, referred to the Tesla Inc. TSLA, +2.62% CEO as a “self-absorbed grifter,” in a late-Thursday tweet that has since been deleted.
However, Musk’s tweet and the Coinbase news appeared to deliver a one-two punch higher for dogecoin, which is well off its recent peak near 75 cents hit on Saturday, hours before crypto bull Musk made a much-hyped appearance on NBC’s comedy sketch show “Saturday Night Live.”
Technical analysts who spoke with MarketWatch said that the meme currency has clearly seen a shift in momentum but it would be really telling if it can reclaim its Saturday record peak.
Jake Wujastyk, chief market analyst at TrendSpider, said that if the asset can contend with selling from newbie investors who may be eager to sell the asset around 54 cents then its trajectory may be more clearly bullish.
“If it can get through this area, the next level above would be the previous highs hit in early May around 74 cents,” wrote the analyst.
“Coinbase offering Dogecoin will definitely add more liquidity to the market for Doge but not necessarily guaranteed to make it move higher,” he said.
Katie Stockton, a market technician and founder of Fairlead Strategies, said that the dogecoin rebound was still “fragile,” and agreed that a breach of 74 cents could be indicative.
“Initial resistance is final resistance at 0.74,” she said.
“Intermediate-term momentum is positive, and short-term momentum is improving. Relative strength versus bitcoin has turned up, but seems fragile,” Stockton said.
Dogecoin prices have enjoyed a parabolic move in the year to date, outstripping the performance of traditional assets. Doge is up over 11,000% so far this year. By comparison. gold futures GC00, +0.95% are down 3%, the Dow Jones Industrial Average DJIA, +1.18% is up over 12%, the S&P 500 index SPX, +1.63% has gained more than 11% and the Nasdaq Composite Index COMP, +2.44% is up more than 4% in the year to date.