As an experienced crypto investor who has been through countless market fluctuations, I must admit that the recent surge of Dogecoin (DOGE) has caught my attention. Having witnessed its meteoric rise and subsequent falls in the past, I’ve learned to take each movement with a grain of salt. However, the current 10% rally in just 24 hours, coupled with the reclaiming of its $18 billion market capitalization, is hard to ignore.
As a researcher examining the cryptocurrency landscape, I’ve noticed an intriguing development regarding Dogecoin (DOGE), the leading memecoin by market cap. In the last 24 hours, DOGE has surged over 10% – a testament to the broader recovery we’re seeing among memecoins across the board.
At the moment, DOGE is valued at $0.1262, which is its peak since September 29th. This represents a significant increase of 44% when compared to its lowest point on September 6th, where it was priced at $0.08888.
The increase in trading activity has mirrored Dogecoin’s price jump. On October 16th, Dogecoin’s spot trading volumes reached a peak of $1.8 billion, marking an uptick of 95% within the past 24 hours and a more substantial rise of 165% over the last week.
The market value of this coin has once again surpassed $18 billion, solidifying its status as the most significant meme-based cryptocurrency globally, based on information from CoinMarketCap.
On October 16th, it was the memecoin with the highest trading volume, surpassing PEPE by more than $600 million in trade volume.
What are the factors behind DOGE’s recent bullish momentum?
DOGE price seeks to end a multimonth downtrend
Many cryptocurrency investors anticipate that Dogecoin will continue its current trend, aiming for a prolonged rebound.
“Doge is ready to run,” pseudonymous altcoin analyst Alstreet Bets wrote in an Oct. 16 post on X.
Currently, cryptocurrency expert Mikybull Crypto posted a chart indicating that the Dogecoin (DOGE) price has surpassed an 180-day downward trendline. The crucial levels of resistance to keep an eye on are at $0.13 and $0.14.
“It looks like god candle is coming.”
For the memecoin, the downward trendline that’s been in place for several months at approximately $0.1047 serves as an immediate line of defense. Moreover, the Moving Average Convergence Divergence (MACD) has recently generated a positive signal, hinting at potential bullish movement.
This occurred as the MACD line (represented by blue) moved above the signal line (orange), indicating a shift in market trends towards an upward trajectory.
It’s important to point out that during its recent surge, Dogecoin (DOGE) has managed to turn significant resistance levels into support. These include the 50-week and 100-week simple moving averages (SMAs), which stand at $0.1196 and $0.970 respectively. As more purchases occur from these congested buyer zones, it’s expected that the DOGE price may continue to rise towards its March 18 peak of $0.2286.
Currently, futures traders are expressing skepticism about a swift market recovery. If the price rises to $0.130, which is where the current 200-day Simple Moving Average lies, it could result in losses of approximately $587,344 from short positions. On the other hand, a drop of an additional 10% down to $0.114 would potentially erase $1.73 million in long positions.
Increasing OI backs DOGE’s recovery
The surge in Dogecoin’s price on Oct. 14 comes after a sharp rise in its open interest (OI).
Market sentiment and potential future price trends can be evaluated by using open interest, a vital indicator that both traders and analysts rely on.
On October 16th, Doge’s Overall Investment (OI) increased to an impressive $755.5 million. This figure represents approximately a 27.3% rise compared to the $593.7 million recorded on the previous day, October 15th, as per data from CoinGlass.
New information from CoinGlass suggests a growing interest in long, leveraged positions on DOGE, evident through the rising perpetual futures funding rate over the recent period.
Keep in mind that the present eight-hour rate of 0.0102% equates to a 0.2142% cost over a seven-day span. This is noteworthy for traders establishing futures positions, as it can add up substantially over time. It’s also important to recognize that if there’s an imbalance caused by excessive optimism, the rate might surge beyond 1% per week in the coming days.
This indicated a continued optimistic attitude among traders, who were ready to spend more to hold their investments, which in turn caused the price of Dogecoin (DOGE) to rise.
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2024-10-16 16:18