Main Points:
Dogecoin (DOGE) surged by 2.5% to $0.20, sparked by Elon Musk’s recent post on X, showcasing the popular memecoin mascot, Shiba Inu. In reaction, DOGE’s price escalated by 29%.
This increase continues DOGE’s remarkable recovery from a recent low of $0.13, its lowest mark since April, amounting to a 55% rebound in just two weeks.
Musk’s tweets have been significant in sparking DOGE’s explosive rise in 2021, pushing prices from just cents to nearly $0.73.
With improving sentiment and multiple bullish technical indicators, the leading memecoin looks set to continue its recovery throughout October.
DOGE’s A&E Indicator Suggests 25% Increase Ahead
Dogecoin is developing an Adam and Eve double-bottom pattern, a bullish reversal formation characterized by a sharp “V”-shaped drop (Adam) followed by a rounded rebound (Eve). This pattern indicates diminishing selling pressure and a resurgence of buyers.
The neckline for DOGE is around $0.216, and a confirmed breakout above this level could initiate a rise toward $0.260, representing a 25% increase from current prices.
This target aligns with the pattern’s anticipated movement and coincides with a significant technical confluence zone. It also corresponds to the 0.382 Fibonacci retracement level on DOGE’s weekly chart, illustrated below.
The prospects for a rebound strengthen further as DOGE rebounds from a support confluence formed by an ascending trendline and a 0.236 Fibonacci level, reinforcing the notion that buyers are defending lower strata while targeting $0.26 as an interim upside goal.
Short Squeeze Could Propel DOGE to $0.26 Target
Futures data indicates a significant volume of short liquidations between $0.215 and $0.27, while long liquidation levels remain largely stable below $0.18.
This imbalance highlights a lower downside risk, with fewer leveraged longs in a position to exert significant selling pressure. Conversely, the upside is interspersed with 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 the rally towards $0.26 as bearish traders are compelled to buy back into the trend.
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.
