The price of Dogecoin is rising today after Elon Musk mentioned “DOGE” during a recent town hall meeting in support of Donald Trump.
Dogecoin prices have risen by about 8.50% in the past 24 hours, reaching $0.136 on October 18, the highest level in three months.
Memecoin’s gains have largely been accompanied by gains in the rest of the cryptocurrency market, suggesting that risk appetite among traders is on the rise. However, it has significantly outperformed top competitors such as Bitcoin and Ethereum.
Musk's mention of "DOGE" triggered a rise in Dogecoin
Dogecoin’s rally today comes following Musk’s Oct. 17 town hall meeting, during which he endorsed Donald Trump for the November U.S. presidential election.
During the event, Musk floated the idea of a government agency called the Department of Government Efficiency, whose acronym, interestingly, is the official code for Dogecoin (DOGE).
Previously, Musk tweeted on October 15 that "DOGE will fix it" in response to an article discussing regulatory hurdles facing his company SpaceX.
The vague statement immediately resonated with Dogecoin enthusiasts, sparking a rally in the price of Dogecoin, which has risen about 25% so far this week.
Musk, who calls himself the "Father of Dogecoin," has driven up the price of Dogecoin through tweets and public statements. His comments on X helped drive Dogecoin up 64,000% between March 2020 and May 2021.
Musk’s large retail investor following often interprets his comments as informal endorsements, which has fueled Dogecoin’s price surges, including the current rally.
Dogecoin enters descending wedge breakout phase
Today’s Dogecoin rally is part of its breakout from a prevailing falling wedge pattern, which is characterized by two converging descending trendlines accompanied by declining trading volume.
Traditional analysts view a falling wedge as a bullish reversal pattern. A falling wedge usually disappears when the price breaks through the upper trendline and can rise by an amount equal to the maximum distance between the upper and lower trendlines of the wedge (measured from the breakout point).
As of Oct. 18, DOGE broke out of the falling wedge pattern and retested the upper trendline as support around $0.105, confirming the strength of the breakout.
The price has since rebounded significantly, with DOGE aiming to break out of the resistance around $0.19 by the end of 2024, in line with the 0.786 Fibonacci level.
Conversely, Dogecoin’s daily relative strength index (RSI) has jumped above 70, which indicates overbought conditions. This typically leads to a period of consolidation or correction, which could slow Dogecoin’s upward momentum in the coming days.
That said, by October, DOGE’s price could drop to the 0.236 Fibonacci support level at around $0.122.
