This Crypto Joke is a Better Investment Than Bitcoin - Seriously

By CCN: Originally created as a programmer's practical joke, Dogecoin has defied the odds to cement its place near the top of the crypto market cap. Joke or not, however, this cryptocurrency is about to mount a serious challenge to Bitcoin, and prescient investors could yield a 185 percent windfall.

Dogecoin Flashes Wildly Bullish Signal

Through the years, one crypto trading formula that has stood the test of time is buying support while the market is oversold. The more oversold, the better.

That’s because oversold conditions provide selling relief. In other words, supply tends to dry up because the price is so low that no one’s interested in selling. Meanwhile, buyers return because the market is cheap.

You don’t have to be a rocket scientist to put two and two together. Rising demand plus low supply very often equates to a price surge

We’re seeing this dynamic happen in Dogecoin, which is currently priced at $0.00294 or 38 satoshis (0.00000038 BTC).

Dogecoin price chart vs bitcoin
Dogecoin trades at strong support while close to oversold territory. | Source: TradingView

A quick look at the daily chart illustrates how Dogecoin bounced at the durable support of 35 satoshis (0.00000035 BTC) on May 13. This bounce was spurred by extreme oversold conditions. Unfortunately, the bounce was short-lived, as bottom-pickers quickly took profits.

Nevertheless, we expect the market to retest 35 satoshis (0.00000035 BTC) in the next few days and become oversold again. If Dogecoin hangs on for dear life, the race to the range high of 100 satoshis (0.00000100 BTC) would be on.

We’re confident that this cryptocurrency is likely to move bullishly - just as it did before - because it is painting a familiar pattern.

Crypto Market Psychology Points to Imminent Rally

Technical analysis is the study of human behavior through historical price action. It captures market psychology by assuming that what happened in the past is likely to happen again in the future.

We’re seeing this assumption play out in Dogecoin as it prints a possible fractal. In trading and even geometry, a fractal is a close representation of a particular structure. The patterns often share many similarities.

Dogecoin crypto price chart
Dogecoin prepares to bounce against Bitcoin. | Source: TradingView

In this cryptocurrency, we can see the right side of the chart imitating the price action on the left side of the chart. The left side of the chart generated four peaks before coming up with a monster rally. We can see the right side of the chart on its way to printing the fourth peak.

In addition, we can also see similarities in daily Relative Strength Index (RSI). The technical indicator had to get close to oversold territory three times before the meteoric rally on August 29, 2018. Again, we are seeing the resemblance this time around.

Bottom Line: Dogecoin Could Triple in Value Against Bitcoin

Crypto investors who agree with this assessment should buy as close to 35 satoshis (0.00000035 BTC) as possible with a tight stop. Should bulls defend the support one more time, Dogecoin will likely hit our target of 100 satoshis (0.00000100 BTC) and reward us with gains of 185 percent.

And yes, at least in the short-term, that means Dogecoin is a better investment than Bitcoin.

Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN. This article is intended for informational purposes only and should not be considered investment advice.

This article is protected by copyright laws and is owned by CCN Markets.

About the author

Kiril Nikolaev
Kiril Nikolaev

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has a bachelor's degree with a specialty in finance and lives in Canada.

Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing.

He owns Bitcoin, Ethereum, and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading.

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