Key takeaways:
Dogecoin (DOGE) increased by 2.5% to $0.20 as the focus shifted to Elon Musk’s recent X post, showcasing the memecoin’s Shiba Inu mascot. In reaction, DOGE’s price rose by 29%.
This move extended DOGE’s strong recovery from its recent low of $0.13, which was its lowest since April, marking a 55% rebound in just two weeks.
Musk’s tweets notably drove DOGE’s remarkable 2021 rally from mere cents to nearly $0.73.
With sentiment improving and numerous technical indicators suggesting bullish trends, the top memecoin seems ready to continue its recovery throughout the latter half of October.
DOGE’s A&E indicator suggests 25% gains next
Dogecoin is establishing an Adam and Eve double-bottom pattern, a bullish reversal setup where a sharp “V”-shaped drop (Adam) is succeeded by a rounded recovery (Eve). This pattern indicates that selling pressure is diminishing while buyers regain influence.
DOGE’s neckline is around $0.216, and a confirmed breakout above this level could catalyze a move toward $0.260, reflecting about a 25% increase from current prices.
This target aligns with the pattern’s measured movement projection and coincides with a crucial technical confluence zone. It also corresponds to the 0.382 Fibonacci retracement level on DOGE’s weekly chart, as illustrated below.
The rebound potential strengthens as DOGE bounces off a support confluence that includes an ascending trendline and a 0.236 Fib line, suggesting buyers are defending lower levels while targeting $0.26 as a temporary upside goal.
Short squeeze could propel DOGE to $0.26 target
Futures data indicates a substantial concentration of short liquidations between $0.215 and $0.27, while long liquidation levels remain relatively stagnant below $0.18.
This discrepancy suggests a lower downside risk, with fewer leveraged longs available to apply significant selling pressure. Conversely, the upside features a dense liquidity wall of shorts ready to be squeezed.
Related: DOGE holders are buying dips: Is $1.60 by 2026 realistic?
Thus, a breakout above the $0.216 neckline could trigger a wave of short liquidations, accelerating a move toward $0.26 as bearish traders are compelled to repurchase into the rally.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
