CoinDesk analysts predicted a large-scale Dogecoin rally

The material is not an investment recommendation and is published for informational purposes only.

What’s new? The largest meme token Dogecoin (DOGE) with a capitalization of $21,64 billion can form a technical pattern “golden cross” on the weekly value chart, which historically foreshadowed a prolonged rally, CoinDesk’s analysts report.

Material by CoinDesk

In technical analysis, the “golden cross” occurs when the short-term Moving Average (MA) crosses the long-term MA, rising higher. The indicator indicates that the asset is in an uptrend. The moving average is one of the most frequently used technical indicators and reflects the average value of an asset price for a certain time. They are used as one of the ways to determine market entry and exit points.

What else is known? In the new year, DOGE has shown impressive growth in returns: since the beginning of the year, the asset has added 68%, 20% ahead of bitcoin.

The 50-week simple moving average (SMA) of the Dogecoin spot price is now in an uptrend and, as analysts suggest, will exceed the 200-week SMA in the coming weeks, forming a “golden cross”. In other words, the short-term price momentum may soon surpass the long-term price momentum, potentially turning into a prolonged bullish trend.

In March, the DOGE price exceeded its 200-week SMA, breaking out of a long consolidation in a narrow price range, and has since consolidated above its critical average.

The approaching “golden cross” will be the first in more than three years. The previous such event, which occurred in early January 2021, entailed a four-month rally that saw the price of the asset on Binance rise by more than 8000% to a record $0,76.

However, analysts emphasize that historical data does not guarantee future performance, and meme tokens such as DOGE have no real-world use cases and are highly speculative, making them more sensitive to fiat liquidity conditions and interest rate expectations.

For example, during the DOGE rally in early 2021, interest rates around the world were near or below zero. Now the US Fed rate is at multi-year highs, above 5%.

In February, Santiment analysts recorded record growth rates for DOGE wallets with non-zero balances, and in April, leading US crypto exchange Coinbase launched DOGE futures.