Dogecoin, the largest memecoin by market capitalization, has rallied more than 10% in the past 24 hours as memecoins have recovered across the board.
Currently trading at $0.1262, the Dogecoin (DOGE) price reached its highest value since Sept. 29, marking a 44% climb from its local low of $0.08888 on Sept. 6.
DOGE/USD daily chart. Source: TradingView
Trading activity also spiked up in tandem with DOGE’s price surge. DOGE’s spot trading volumes topped $1.8 billion on Oct. 16, rising by 95% over the last 24 hours and 165% over the last seven days.
Its market capitalization reclaimed the $18 billion mark, cementing its position as the biggest memecoin, according to data from CoinMarketCap.
It is also the most traded memecoin on Oct. 16, outpacing Pepe (PEPE) by more than $600 million in volume.
What are the factors behind DOGE’s recent bullish momentum?
DOGE price seeks to end a multimonth downtrend
Several crypto traders said they expect Dogecoin to build on the current momentum to initiate a sustained recovery.
“Doge is ready to run,” pseudonymous altcoin analyst Alstreet Bets wrote in an Oct. 16 post on X.
Crypto technical analyst Mikybull Crypto shared a chart showing the DOGE price breaking above a 180-day descending trendline, with $0.13 and $0.14 being key resistance levels to watch, while writing:
“It looks like god candle is coming.”
The multimonth descending trend line at $0.1047 is acting as immediate support for the memecoin. The moving average convergence divergence (MACD) indicator has just produced a bullish signal.
This happened when the MACD line (blue) crossed above the signal line (orange), suggesting that market conditions had flipped in favor of the upside.
DOGE/USD weekly chart. Source: TradingView
It is worth noting that DOGE’s latest rally has seen it flip crucial levels into support, including the 50-week and 100-week simple moving averages (SMAs) at $0.1196 and $0.970, respectively. Increased buying from these buyer congestion zones will likely push the DOGE price higher toward 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, where the 200-day SMA currently sits. A further 10% decline down to $0.114 would wipe out $1.73 million in long positions.
DOGE exchange liquidation heatmap. Source: CoinGlass
Related: Grayscale puts DOGE, Worldcoin on list of 35 potential crypto products
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).
Open interest is a key metric that traders and analysts use to assess market sentiment and anticipate future price movements.
DOGE’s OI rose to $755.5 million on Oct. 16, about 27.3% higher than the $593.7 million recorded a day prior, according to CoinGlass data.
DOGE open interest across all exchanges. Source: CoinGlass
Additional data from CoinGlass reveals increasing demand for leveraged long positions in DOGE over the last few days, as indicated by the perpetual futures funding rate.
DOGE average perpetual contracts 8-hour funding rate. Source: CoinGlass
Note that the current 0.0102% eight-hour rate translates to a 0.2142% cost over a seven-day period, which is significant for traders building futures positions. Typically, when there is an imbalance driven by excessive optimism, the rate could easily exceed 1% per week over the next few days.
This signaled sustained bullish sentiment, with traders willing to pay more to maintain long positions, ultimately driving DOGE prices higher.
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.
