Dogecoin, the largest memecoin by market capitalization, is up more than 10% in the past 24 hours as memecoins recover across the board.
Currently trading at $0.1262, the price of Dogecoin (DOGE) has reached its highest since September 29, up 44% from the local low of $0.08888 on September 6.
DOGE/USD daily chart. source: TradingView
Along with the surge in DOGE’s price, trading activity also surged. DOGE’s spot trading volume surpassed $1.8 billion on October 16, up 95% in the past 24 hours and 165% in the past 7 days.
Its market capitalization has regained $18 billion, cementing its position as the largest memecoin, according to data from CoinMarketCap.
It is also the most traded memecoin as of October 16, surpassing Pepe (PEPE) by over $600 million.
What’s driving DOGE’s recent bullish momentum?
DOGE price is about to end its multi-month downward trend.
Several cryptocurrency traders said they expect Dogecoin to build on its current momentum to begin a sustained recovery.
“Doge is ready to run,” anonymous altcoin analyst Alstreet Bets wrote in a post to X on October 16.
Cryptocurrency technical analyst Mikybull Crypto shared a chart showing DOGE price breaking the 180-day downtrend line, with $0.13 and $0.14 being key resistance levels to watch.
“I think God Candle is coming.”
The multi-month downward trendline at $0.1047 is acting as immediate support for memecoin. The Moving Average Convergence Divergence (MACD) indicator has just generated a bullish signal.
This occurred when the MACD line (blue) crossed the signal line (orange), indicating a market reversal to the upside.
DOGE/USD weekly chart. source: TradingView
It is worth noting that DOGE’s recent rally has seen important levels turn into support levels, including the 50-week and 100-week simple moving averages (SMA) at $0.1196 and $0.970, respectively. Increased buying in these buyer congestion zones is likely to push DOGE price up to the March 18 high of $0.2286.
Meanwhile, futures traders are doubtful of a quick rebound, with $587,344 in short positions at risk if the price recovers to $0.130, which is where the 200-day SMA currently lies. A further 10% decline to $0.114 would result in a loss of $1.73 million on the long position.
DOGE exchange liquidation heatmap. Source: Coinglass
relevant: Grayscale has added DOGE and Worldcoin to its list of 35 potential cryptocurrency products.
Increased OI supports DOGE’s recovery
The surge in Dogecoin price on October 14 was due to a surge in open interest (OI).
Open interest is a key indicator used by traders and analysts to assess market sentiment and predict future price movements.
According to CoinGlass data, DOGE’s OI was $755.5 million on October 16, up about 27.3% from $593.7 million recorded the previous day.
DOGE open interest applies across all exchanges. Source: Coinglass
Additional data from CoinGlass shows that demand for leveraged long positions in DOGE has increased over the past few days, as evidenced by perpetual futures funding ratios.
DOGE average perpetual contract 8-hour funding rate. Source: Coinglass
The current 8-hour rate of 0.0102% translates to a cost of 0.2142% over a 7-day period, which has important implications for traders building futures positions. Typically, when excessive optimism causes an imbalance, the rate can easily exceed 1% per week over the next few days.
This indicates continued bullish sentiment that will push DOGE prices higher as traders are willing to pay more to hold long positions.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.