NOIDA (CoinChapter.com) — Dogecoin (DOGE) saw a notable price surge over the past week, climbing from around $0.123 to its current level of $0.179. The rally has sparked increased interest among traders, with factors such as Elon Musk’s D.O.G.E initiative, a rise in futures open interest, and the upcoming U.S. elections driving speculation.
The events generated optimism in the market, with many investors expecting Dogecoin’s price to continue its upward momentum.
Bullish Sentiment Helped Token’s Rally
Recent data from Coinglass highlights the rise in DOGE’s open interest, which signals growing participation in the futures market. The rising OI levels suggest that more traders are betting on significant price movements.
DOGE futures open interest. Source: CoinglassThe sharp increase from mid-October onward, when open interest soared from roughly $700 million to over $1 billion, indicates an influx of traders expecting bullish outcomes.
Moreover, the surge in open interest typically correlates with increased volatility, which traders often interpret as a signal for potential price movements.
The funding rate chart also indicates sustained bullish sentiment. The funding rate remains consistently positive, showing that long positions dominate, with traders paying a premium to hold their long trades.
DOGE OI-weighted funding rate.Positive funding rates often suggest that market participants expect further price increases. Such an outlook aligns with the broader speculative interest in Dogecoin, partly fueled by Musk’s involvement and upcoming macroeconomic events like the U.S. elections.
Elon Musk’s recent political involvement has been critical in fueling Dogecoin’s rally. During a Trump campaign rally, Musk teased the idea of a “Department of Government Efficiency” (D.O.G.E.), which sparked excitement in the Dogecoin community.
Following the event, Dogecoin saw an immediate 7% price jump, climbing past $0.13, its highest level since July. Musk’s involvement with Trump, including a $75 million donation to the campaign, has intensified speculation that a Trump victory in the upcoming U.S. elections could further boost DOGE.
DOGE Price Rally Takes A Break
Meanwhile, the DOGE USD pair’s bull run halted on Oct. 30, with the memecoin dropping nearly 6% to reach a daily low near $0.164. A build-up of profit booking sentiment likely led to the plummeting Dogecoin prices.
Additionally, the relative strength index for Dogecoin had been overbought since Oct. 28. Despite Oct. 30’s downtrend, the RSI remained overbought with a score near 71.68
DOGE USD daily price chart with RSI. Source: TradingviewOverbought RSI levels often precede trend reversals for an asset, so traders often consider the occurrence a sell signal.
If the downtrend continues, DOGE price risks a drop to the support level near $0.156. Moreover, breaching the immediate support level might force Dogecoin price to test the support near $0.134.
Conversely, a rally would likely see DOGE price rise to the resistance near $0.19, flipping which would set the memecoin on the path to challenge the resistance near $0.21 before corrections pare gains.
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