The Dogecoin price retreated slightly on Friday after staging an excellent rally this week. DOGE dropped to $0.26, which was relatively lower than this week’s high of $0.2905. It is about 50% above the lowest level this week, bringing its total market cap to more than $33 billion.
The background. Dogecoin, like all cryptocurrencies, has struggled in the past few weeks. Its price surged in May as Elon Musk hosted SNL, the popular television show. It then crashed by more than 70% as investors rushed to sell the news. The coin has also declined because of the overall sell-off of cryptocurrencies as regulatory and interest rates concerns remain.
China has taken a bigger role in regulations by cracking down on mining companies and individuals and prohibiting banks and other financial companies from dealing with the coins. As such, investors believe that demand for these coins will fall since China is one of the leading countries in the industry. So, what next for DOGE this year?
Turning to the daily chart, we see that the Dogecoin price has been in an overall upward trend in the past few months. Recently, however, the coin has struggled and formed a descending channel that is shown in blue. Today, the price is along the upper side of this channel. Also, the price is attempting to go above the 50-day and 100-day EMAs.
A closer look of the chart shows two patterns. First, we see that it has formed a head and shoulders pattern, which is usually a bearish signal. Second, the coin has formed a bullish flag pattern that is shown in blue. These patterns send mixed pictures of what to expect for the rest of 2021 since a flag is usually a sign of continuation.
In my view, I suspect that the Dogecoin will bounce back and retest its all-time this year. For this to happen, bulls will need to move above the upper side of the channel and the right shoulder level at $0.44. On the flip side, a drop below the lower side of the channel will man that the H&S pattern has prevailed, meaning that the coin could fall further.
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