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The price of Dogecoin (DOGE) has increased by approximately 5% over the past 24 hours, reflecting similar patterns observed in the broader cryptocurrency market.
Grayscale news boosts Dogecoin
Although DOGE’s price fell by 2.4% on August 30, it has risen 5% from the lows recorded yesterday, while the overall cryptocurrency market capitalization has risen by 4.5%.
Related: What is driving Bitcoin’s price increase today?
DOGE/USD compared to daily performance of crypto market capitalization. Source: TradingView
The surge in Dogecoin’s price began following a significant setback for the U.S. Securities and Exchange Commission’s (SEC) actions against the cryptocurrency industry.
On August 29, a federal court determined that the SEC had arbitrarily blocked Grayscale Investments, a cryptocurrency investment firm, from converting its Bitcoin (BTC) trust into an exchange-traded fund (ETF). Grayscale’s victory has sparked optimism regarding the potential approval of a spot Bitcoin ETF in the U.S.
99.99999% of the world doesn't know that the SEC has to decide on 7 BTC ETFs within the next 3 days:
-blackrock
-bitwise
-vaneck
-wisdomtree
-invesco
-fidelity
-valkyrie
the suits at our doorstep— odin free (@odin_free) August 29, 2023
The price of BTC surged nearly 8% on the day of the ruling, propelling other cryptocurrency assets upward, especially as Bitcoin and Dogecoin exhibit a strong correlation of 0.96.
DOGE/USD and BTC/USD daily correlation coefficient. Source: TradingView
Elon Musk obtains crypto license for X
The recent gains in Dogecoin also align with Elon Musk’s entry into payment services for X (previously known as Twitter).
On August 28, regulators in Rhode Island issued a currency transmitter license to X, allowing the social media platform to provide financial services, including cryptocurrency transactions. This news began to circulate widely on August 29.
Just In! X (the artist formerly known as Twitter) has just received a license that will let it offer crypto services to store, swap, and transfer Bitcoin and other crypto.
Elon Musk about to intro 400 million users into the market. pic.twitter.com/hKLDC7PMdf— Lark Davis (@TheCryptoLark) August 29, 2023
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Musk, who has openly supported Dogecoin, has previously suggested the possibility of integrating DOGE payments on X. Since then, speculation regarding DOGE payments on the platform has led to price increases on multiple occasions.
DOGE price bear flag
From a technical perspective, Dogecoin has been trading within what seems to be a bear flag pattern since August 17. Consequently, DOGE’s price remains confined within a narrow range, which could lead to a significant breakdown in the upcoming weeks.
A bear flag is generally regarded as a bearish continuation pattern. It typically resolves when the price falls below its lower trendline, potentially declining by an amount equivalent to the height of the preceding downtrend (known as the flagpole).
Thus, the bear flag target for DOGE/USD is approximately $0.051 by September, representing a decline of over 20% from current price levels.
DOGE/USD daily price chart. Source: TradingView
However, analyst Crypto Rover contends that Dogecoin’s robust fundamentals could support its price in the long run.
Related: Grayscale wins the court battle, but what does this mean for a spot Bitcoin ETF?
Importantly, DOGE’s price is currently testing a multi-year descending trendline resistance as support, seven weeks after breaking above it, which may confirm the breakout.
DOGE/USD weekly price chart. Source: TradingView/Crypto Rover
Nonetheless, this DOGE price chart indicates two significant technical resistances: the 50-week exponential moving average (50-week EMA; the red wave) near $0.079 and the 200-week EMA (the blue wave) near $0.086.
DOGE/USD weekly price chart. Source: TradingView
Surpassing these critical levels could establish a price target of $0.106, which acted as support in February 2022 and resistance in October 2022 and April 2023.
Consequently, a 60% price increase by the end of 2023 is possible, but overcoming these two key resistance levels will be essential for bullish momentum in the coming weeks and months.
This article does not provide investment advice or recommendations. Every investment and trading decision carries risk, and readers should perform their own research before making a choice.
