The Dogecoin (DOGE) price rally prolonged additional on Oct. 29 in hopes that the cryptocurrency would get a significant increase from Elon Musk’s Twitter acquisition.
Elon Musk boosts Dogecoin price once more
Dogecoin price jumped by almost 75% to achieve $0.146 on Oct. 29, the largest day by day acquire since April 2021.
DOGE/USD day by day price chart. Source: TradingView
Notably, the meme-coin’s huge intraday rally got here as part of a broader uptrend that began earlier this week on Oct. 25. In whole, DOGE’s price gained 150% in the course of the Oct. 25-29 price rally.
The surge was additionally accompanied by a good enhance in its day by day buying and selling volumes. That coincided with a spike in the variety of DOGE transactions exceeding $100,000, in keeping with Santiment. Both indicators sugges a rising demand for Dogecoin tokens amongst wealthy traders, or so-called “whales.”
Dogecoin whale transaction depend. Source: Santiment
The soar throughout Dogecoin’s key metrics replicate traders’ pleasure about Elon Musk’s Twitter acquisition on Oct. 27. Earlier this yr, the billionaire entrepreneur had flirted with the concept of constructing Dogecoin a cost technique to buy the Twitter Blue subscription.
Musk’s Tesla and SpaceX already settle for DOGE funds for his or her merchandise.
$DOGE, the official foreign money of Twitter.
— David Gokhshtein (@davidgokhshtein) October 28, 2022
Shiba Inu, meme-coins comply with DOGE
Shiba Inu (SHIB), the second-largest meme token by market capitalization, posted a copy-cat rally as properly.
On Oct. 29 alone, SHIB’s price jumped by 30% to $0.00001519, its highest degree since August 2022. Like Dogecoin, Shiba Inu’s rally got here as part of a broader uptrend that began on Oct. 25. Since then, its price has gained 53%.
SHIB/USD day by day price chart. Source: TradingView
Additionally, different meme cash have jumped massively in the mentioned interval, together with Dogelon Mars (ELON), which rallied 140%.
Meme cash efficiency on hourly, day by day, and weekly timeframes. Source: CoinMarketCap
Dogecoin most overbought since April 2021
Dogecoin’s ongoing price rally is beginning to look overstretched, nonetheless, in keeping with a traditional technical indicator.
The relative power index (RSI), a momentum indicator figuring out the diploma of latest price adjustments to research overbought or oversold ranges, has risen to 93.69 on the day by day Dogecoin chart. This is the best degree since April 2021, a month earlier than the DOGE price rallied to its file excessive of $0.75.
(*4*)DOGE/USD day by day price chart. Source: TradingView
Therefore, the “overbought” circumstances don’t essentially imply a direct bearish reversal. But they do replicate the present euphoric shopping for momentum in the market, which ultimately prompts the price to pattern both sideways or appropriate downward.
Dogecoin’s 2018-2020 bear market on a weekly chart sheds gentle on related price motion. Notably, DOGE crashed by nearly 95% nearly two years after peaking at $0.0194 in January 2018.
Related: Bitcoin price broke out this week, but has the pattern modified?
The token’s correction interval noticed it trending inside a descending channel. It broke out of the vary to the upside in July 2020 but adopted the upside transfer with a sideways consolidation pattern — between its 0 Fib line of 0.0022 and 0.236 Fib line of $0.0054 — till December 2020.
DOGE/USD weekly price chart. Source: TradingView
In comparability, Dogecoin’s ongoing bear market is shorter but exhibits the same pattern trajectory to the 2018-2020 interval, as proven above. Therefore, DOGE might fluctuate inside its present 0-0.236 Fib line vary (or the $0.055-$0.176 vary) following its descending channel breakout.
In different phrases, DOGE might appropriate towards $0.055 by the tip of this yr, down about 60% from present price ranges, if the fractal performs out as meant.
Conversely, a direct breakout above the 0.236 Fib line might have DOGE eye $0.25 as its subsequent upside goal.
The views and opinions expressed listed below are solely these of the writer and don’t essentially replicate the views of Cointelegraph.com. Every funding and buying and selling transfer entails danger, it’s best to conduct your individual analysis when making a call.