Monday, Dogecoin (CRYPTO:DOGE) continued to give back the gains, and more, that were propelled by Tesla, Inc. (NASDAQ:TSLA) decision to start accepting crypto as payment for some of its wares.
Dogecoin soared more than 25% at one point on Friday after Tesla listed some of the products for sale on its Dogecoin website, including its Cyberwhistle and Cyberquad for Kids which cost 300 DOGE and 12,020 DOGE respectively.
When Dogecoin hit 21 cents on Friday, the Cyberquad would have cost a customer the equivalent of $2,524.50. However, Dogecoin’s sharp decline to Monday’s low of $0.165 has reduced that price to the equivalent of US$1,983.30, highlighting the challenges faced by businesses and consumers when using Dogecoin. and other cryptos as a means of payment due to their inherent volatility.
The lower Dogecoin price may also not be a red flag for bulls, as Dogecoin appears to be consolidating in an uptrend on the daily chart.
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The Dogecoin chart: When Dogecoin hit a low of $0.151 on Jan. 10, bulls entered and bought the dip, causing the crypto to print a hammer candlestick on the daily chart. A hammer candlestick is often a bullish reversal signal that marks a temporary low in a stock or crypto.
- The hammer candlestick was recognized as over the next four 24-hour trading sessions, Dogecoin soared 57% to hit a Friday high of $0.215. On Monday, Dogecoin was trading around 5% lower, but was possibly preparing to print another higher low above the most recent low of $0.167, which was printed on January 12.
- Traders can watch for Dogecoin to print another reversal candle above this level, such as another hammer candlestick or a doji, to indicate that the crypto will reverse its upward path again. If that happens, then traders will want to see if Dogecoin can print another consecutive high, but if Dogecoin breaks below the $0.167 level, the uptrend will be reversed.
- Dogecoin has resistance above $0.176 and $0.196 and support below at $0.167 and the 15 cent mark.
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