Main Points:
Dogecoin (DOGE) surged 2.5% to $0.20 as attention shifted to Elon Musk’s recent post on X, highlighting the mascot Shiba Inu. The price of DOGE rose 29% following this announcement.
This increase marked a significant rebound for DOGE from its recent low of $0.13, its lowest point since April, achieving a 55% recovery in just two weeks.
Musk’s previous tweets notably drove DOGE’s explosive rally in 2021, when it soared from mere cents to nearly $0.73.
With market sentiment improving and several technical indicators showing bullish trends, the leading memecoin seems positioned for further recovery in the latter half of October.
DOGE’s A&E Indicator Suggests 25% Potential Gains
Dogecoin is forming an Adam and Eve double-bottom pattern, a bullish reversal configuration where a sharp “V”-shaped decline (Adam) is succeeded by a rounded ascent (Eve). This pattern indicates that selling pressure is diminishing as buyers regain control.
The neckline for DOGE lies around $0.216, and a validated breakout above this threshold could propel prices toward $0.260, around 25% higher than current levels.
This target aligns with the pattern’s projected move and coincides with a significant technical confluence area. It also corresponds to the 0.382 Fibonacci retracement level on DOGE’s weekly chart, depicted below.
The prospects for recovery are further supported 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 an interim upside goal.
Short Squeeze Could Propel DOGE Toward $0.26 Target
Futures data indicates a significant concentration of short liquidations between $0.215 and $0.27, while levels for long liquidations remain relatively stable below $0.18.
This disparity suggests a lower risk for downside movements, as there are fewer leveraged longs that could trigger substantial selling pressure. Conversely, the upside features a substantial 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 initiate a wave of short liquidations, propelling the price toward $0.26 as bearish traders are compelled to buy back 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.
