Dogecoin Soars 62% This Week Could Higher Gains Follow?

• DOGE's current price trajectory mirrors trends observed in late 2020 and 2016.

• A bullish crossover is about to occur for the first time since early January 2021.

Dogecoin (DOGE), the leading meme-based cryptocurrency, has experienced a remarkable surge, climbing 62% this week, marking its most significant performance since February.

Historical Price Patterns

A detailed analysis of DOGE's weekly price chart reveals that the cryptocurrency is echoing a pattern from late 2020, which led to a staggering 1,500% price increase, reaching 73 cents by early May 2021.

This latest price increase follows the conclusion of the recent U.S. presidential election and a prolonged period of sideways trading, reminiscent of the trends seen in late 2020 and 2016.

Technical Analysis Insights

The 50-week simple moving average (SMA) is on the verge of crossing above the 100-week SMA. This technical signal is encouraging for momentum traders who have been cautious until now. A similar bullish crossover was observed after the November 2020 U.S. election.

If past performance is any indicator, DOGE may continue its upward trajectory in the coming weeks, potentially surpassing the 2021 high of 73 cents.

Additional Indicators of Growth

Other technical indicators also support a positive outlook. For example, the 14-week relative strength index has surpassed 70, suggesting strong upward momentum. This level has historically marked the onset of the fear of missing out (FOMO) phase during the 2021 bull run.

It is important to note that memecoins like DOGE are typically more volatile than major cryptocurrencies such as Bitcoin and Ether. This volatility requires traders to closely monitor their positions and employ effective risk management strategies, including stop-loss orders.

Closure

DOGE seems to be replicating the 2020 price pattern with remarkable accuracy.

Omkar Godbole, a chartered market technician, serves as a senior analyst and co-managing editor for markets at CoinDesk. The opinions expressed in this article are solely his own.