Dogecoin’s price surge has paused as bears defend the $0.17 resistance level. The cryptocurrency experienced a significant increase in value over the past week, climbing from $0.123 to $0.179. This surge has piqued the interest of 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 increase in DOGE’s open interest signals a growing participation in the futures market. This rise in open interest suggests that more traders are betting on significant price movements. The surge in open interest from mid-October, when it soared from roughly $700 million to over $1 billion, indicates an influx of traders expecting bullish outcomes.
The funding rate chart also indicates sustained bullish sentiment, with long positions dominating and traders paying a premium to hold their long trades. Positive funding rates often suggest that market participants expect further price increases, aligning with the broader speculative interest in Dogecoin fueled by Musk’s involvement and upcoming macroeconomic events like the U.S. elections.
Musk’s recent involvement in a Trump campaign rally, where he teased the idea of a “Department of Government Efficiency” (D.O.G.E.), sparked excitement in the Dogecoin community and led to an immediate 7% price jump. However, the rally paused on October 30, with the memecoin dropping nearly 6% to reach a daily low near $0.164. The relative strength index for Dogecoin has been overbought since October 28, indicating a potential trend reversal.
If the downtrend continues, DOGE’s price risks dropping to the support level near $0.156, and breaching the immediate support level might force Dogecoin’s price to test the support near $0.134. Conversely, a rally would likely see DOGE’s price rise to the resistance near $0.19, with the potential to challenge the resistance near $0.21 before corrections pare gains.