Dogecoin DOGE/USD went on a tear during Sunday’s trading session, climbing over 16% higher before calming down to trade about 8% higher at press time. The crypto has been fighting to regain an important support and resistance level at $0.083.
Dogecoin’s jump higher was aided by Bitcoin (CRYPTO; BTC) and Ethereum ETH/USD, which surged temporarily over key psychological resistance levels at $25,000 and $2,000, respectively, early during the trading period.
Unlike Ethereum and Bitcoin’s jaunts north, Dogecoin made its big move on massive volume, which may indicate a high level of interest has returned into the crypto.
Volume is the total number of shares traded in a security within a specific period of time. It’s a momentum indicator used by technical traders to gage overall interest and sentiment in a stock or crypto. Volume is also used as an indicator to confirm a trend or trend change.
When bullish trading volume increases, the price of the crypto usually moves higher whereas increasing bearish volume, when a stock is in a downtrend, usually pushes the price lower. In contrast, lower than average trading volume usually indicates consolidation, which results in the crypto trading sideways.
- When a bullish trader has a position in a security, decreasing volume can act as a sell signal because it indicates the stock is running out of buyers. When increasing volume eventually comes in to break the crypto out of the sideways range, bullish traders may choose to enter a position if the crypto begins to move upwards.
- A bearish trader in a short position may watch for decreasing bearish volume to indicate the crypto is running out of sellers and a reversal may be in the cards. If big bearish volume eventually picks up and breaks the crypto down from a consolidation pattern, bearish traders may choose to enter into a short position.
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The Dogecoin Chart: Dogecoin’s big bullish volume pushed the crypto up over the most recent higher high, which confirms the uptrend is currently recognized by the algorithms. The most recent higher low within the uptrend was printed on Aug. 12 at $0.069 and the most recent confirmed higher high was formed at the $0.0755 mark on the day prior.
- Dogecoin is also trading above an ascending trendline on the daily chart. The most recent time Dogecoin has tested the area as support was on Aug. 10, and the crypto reacted bullishly to the level. When Dogecoin retraces to form its next higher low within its uptrend, traders can watch for the crypto to print a bullish reversal candlestick at the trendline.
- At press time, Dogecoin’s trading volume on Coinbase was measuring in at about 769 million, compared to the 10-day average of about 276.76 million. Bullish traders will want to see continued momentum on higher-than-average volume take place during Monday’s 24-hour trading session for confirmation that interest is returning to the crypto.
- If Dogecoin closes the trading day near its high-of-day price, the crypto will print a bullish engulfing candlestick on the daily chart, which could indicate higher prices will come again during Monday’s session. If the crypto closes the session with a noticeable upper wick, it could indicate a retracement is in the cards.
- Dogecoin has resistance above at $0.083 and $0.097 and support below at $0.075 and $0.065.
Image and article originally from www.benzinga.com. Read the original article here.