After a Sudden, Brief Pullback, Dogecoin Has Rebounded Strongly

After a sudden, brief pullback on Tuesday, Dogecoin has rebounded strongly as bullish sentiment returned to the broader crypto market

Dogecoin (CRYPTO: DOGE) prices pulled back slightly on Tuesday after a strong rally in the past month. However, technical indicators suggest that the cryptocurrency could continue its upward trend in the coming weeks.

What Happened: Seasoned crypto analyst and investor, Trader Tardigrade, shared an analysis of DOGE’s 1-day chart on X (formerly Twitter), highlighting a promising trend that signals increasing momentum in the meme coin.

According to the analysis, DOGE looks poised to continue its upward trajectory, aided by a newly formed bullish cross—the Golden Cross. A Golden cross occurs when a short-term moving average crosses above a long-term moving average, often indicating a potential shift in price dynamics from bearish to bullish.

The indicator is sometimes seen as a predictor of long-term rallies. In the case of DOGE, the crucial signal comes at a time when the cryptocurrency is showing robust resilience in the face of wider market swings.

The recent golden cross appeared as the 20-day Exponential Moving Average (EMA) crossed the 50-day EMA. This occurred after several months of a bearish downtrend, triggered by a death cross. The death cross happened late January this year, hindering the meme coin for the next 4 months.

Trader Tardigrade stated that the golden cross marked the end of the 4 month downward trend as it put the meme coin back into positive territory once again.

This development hints at the continuation of the current uptrend, with the expert predicting a rally to the $0.56 level in the upcoming weeks.

"Golden cross on the 1-day chart, which also marks the end of the 4-month downtrend and puts back into positive territory once again. Expecting to continue to rally toward the $0.56 level in the coming weeks."

In a larger time frame, particularly the 1-month chart, Trader Tardigrade revealed that Dogecoin is finalizing cycle 3 as it gears up for a rally to this cycle peak.

The expert’s analysis is based on past trends that led to DOGE’s most powerful move, classified under the 3 cycles. Each cycle shows the cryptocurrency’s performance from a bear market phase to a bullish market phase.

As seen in the chart, the meme coin is currently in the final part of cycle 3, which signals a substantial move to a cycle top, which is at the $20 mark.

“Dogecoin is rounding out Cycle 3 on the 1-month chart in preparation for a move to the cycle peak. Past trends suggest that the largest moves for Dogecoin can be broken down into 3 cycles.”

It is worth noting that Dogecoin’s Open Interest (OI) has significantly risen amid recent price spikes. With interest increasing, mood turning bullish, and buying pressure steadily increasing, the meme coin might be preparing for its next leap upward.

According to Glassnode, Futures Open Interest has increased by +63.9% in the last week, even as DOGE pulled back from recent highs.

According to the on-chain platform, open interest rose from $989 million to $1.62 billion within the time frame.

According to Glassnode, this decoupling situation must be closely monitored since it indicates that there is ongoing speculative positioning even as price momentum stalls.

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