Dogecoin is approaching the Golden Cross: What does it mean for traders?

Dogecoin (DOGE) may be poised to reward long-term holders and traders if the market's crypto tea leaf reading is correct. The main meme coin is heading towards what is known in trader parlance as a “golden cross”.

what does that mean? Let's dive into a little DOGE TA (so if lines on charts aren't your thing, the rest probably isn't for you).

Of course, Dogecoin is down today, down 1.9% to $0.145, but the weekly performance remains positive: DOGE has increased by 5% in the last seven days. As we noted, despite the correction in the last four days, this uptrend will continue.

And if we look a little closer, there is even more reason for optimism: the 50-week simple moving average (SMA) of the token is currently rising and if things go in this direction – it may cross above the 200-week SMA. In the coming weeks. That intersection creates a golden cross — something that hasn't happened to Dogecoin since early 2021. And that was before DOGE went on a mega run and hit an all-time high of over $0.73 per coin four months later.

Simply put, the formation of a gold cross means that new buyers are scoring faster than long-term holders (who had to put up with the slow performance of the past few days). For traders, this indicates a bullish market trend and is often interpreted as a strong buy signal, signaling the end of a winning trend and the beginning of a bullish phase.

So how did DOGE find himself on the brink of another Golden Cross? The first positive sign of Dogecoin price occurred in March when it broke the 200-week SMA, gaining more than 70% in one week. This move helped the SMA 200 rise, breaking its previous flat performance. As mentioned, the upcoming Golden Cross will be the first in more than three years.

The previous Golden Cross, in January 2021, was shortly before buyers sent the coin from $0.0096 to over $0.73 in May of that year—an 8,000% price increase. But most of you know what happened next: That spike dropped 90% in the months that followed. Dogecoin stabilized between $0.05 and $0.10 from May 2022 to February 2024.

So what does all that mean? Well, although traders can interpret such data and often use it to guide their decisions and behavior, that doesn't mean it will happen again. So don't break out that expensive champagne for an OG meme coin just yet.

After all, the golden cross is only one of many indicators that traders look at, and prudent investors take into account risk management strategies and other factors.

For example, and perhaps most importantly, the market as a whole was in a completely different place in 2021. Macroeconomic conditions have changed, and geopolitical turmoil has market participants panicking at the moment. So when it comes to trying to time the market for high profits, it's important to remember that while history can often rhyme, lightning never strikes twice.