Key Takeaways:
- Dogecoin prices started rallying following Elon Musk’s rebranding of Twitter.
- DOGE price is moving inside a bullish wedge pattern.
- The memecoin rose nearly 28% since July 13.
NEW DELHI (CoinChapter.com) — Meme token Dogecoin (DOGE) price painted its highest single-day gains since April 3, 2023, on July 26. The rally likely had something to do with speculations of X (formerly Twitter), likely including DOGE payments.
Real Vision CEO Raoul Pal took to Twitter to speculate that Tesla chief Elon Musk might choose DOGE as a global payment method for creators.
In reply to a crypto user asking why Musk might not go with any other crypto token, Pal noted that the Tesla chief owned a sizeable chunk of the meme token. Musk has also claimed DOGE is his “fav” token.
Additionally, crypto analyst Kaleo stated that Elon Musk might take some time to decide on a path forward regarding DOGE integration at X.
I think there’s a solid chance he actually does something this time,a though, and him including it in his bio at the same time as the X rebrand isn’t just a coincidence.
Kaleo stated on Twitter
The analyst advised his 594,000 followers that it would be a “solid move” to accumulate the memecoin on dips.
It seems traders agree with Kaleo, considering that the dollar value locked in the number of active perpetual futures contracts for DOGE reached $512.7 million on July 26. DOGE’s notional open interest reached above the $500 million mark for the first time since April 19 earlier this year.
Furthermore, DOGE’s OI-weighted funding rate has become positive, suggesting that traders put more money in bullish long bets than bearish short positions.
DOGE Price Forms Bullish Technical Pattern
Meanwhile, the DOGE price has formed a bullish technical pattern called the ‘falling wedge.‘
The technical pattern forms when the price fluctuates inside a pair of falling trendlines that would converge down the slope. The outcome of such downside patterns is typically a price breakout to the upside.
One key feature of the pattern is that volumes usually decline as the trendlines converge.
The upside target for the breakout is equal to the maximum distance between the falling wedge’s upper and lower trendlines. Thus, confirming the pattern could see the Dogecoin token price rise nearly 72% to $0.136.
DOGE price is currently testing the upper trendline resistance of the pattern. If the meme token fails to break out, the Dogecoin price could drop to test the support near the lower trendline of the wedge.
Profit Booking Pares DOGE’s Gains
After closing on July 25 with 10% gains, the DOGE price dropped nearly 5.1% on July 26 as traders started booking profits. Furthermore, July 25’s jump propelled DOGE’s relative strength index into the overbought region.
Traders consider the occurrence a sell signal, so overbought RSI levels often precede an asset’s price correction or consolidation period.
Dogecoin reacted in a textbook manner to the overbought RSI, with the ensuing correction pushing RSI back into the neutral region with a value of 64.19 on the daily charts.
Should the correction continue, the DOGE price would likely fall to the 200-day EMA (green wave) support near $0.0757. Moreover, breaching the immediate support level might result in the meme token price testing its 50-day EMA (purple wave) support near $0.0697 before recovering.
On the other hand, the golden cross between the 20-day EMA (red wave) and the 100-day EMA (blue wave) could attract buyers to the market. As a result, the DOGE price could rise to the resistance near $0.0817.
Moreover, breaking and consolidating above the immediate resistance could help the DOGE price target the resistance near $0.088 before correcting.
