D.O.G.E. and DOGE Correlation: What Is That About?

The latest DOGE price surge was mainly driven by recent comments from Elon Musk. Known as the "Dogefather," Musk has once again sparked a rally in the meme coin after briefly and implicitly mentioning DOGE during a Pennsylvania town hall event in support of Donald Trump’s presidential campaign. So, what is the D.O.G.E. and DOGE correlation all about?

By TradingView - DOGE Price Performance

On October 17, during a town hall event in Pennsylvania, Elon Musk hinted at the creation of a new government agency called the Department of Governmental Efficiency (D.O.G.E.), a term that aligns perfectly with Dogecoin’s official ticker. Musk’s playful mention of D.O.G.E. immediately resonated with Dogecoin enthusiasts and investors, sparking a DOGE price rally. Since, DOGE price surged by over 10.5%, following the event, reaching $0.1349. Over the last week, the meme coin has gained nearly 25%, outperforming top cryptocurrencies such as Bitcoin (BTC) and Ether (ETH).

DOGE Price Rally: The Falling Wedge Breakout

The recent DOGE price surge is not only driven by Musk’s comments but also by technical indicators. The coin has recently broken out of a falling wedge pattern—a bullish reversal signal in technical analysis. This pattern, characterized by two converging downward trendlines, often indicates an impending price rally once the upper trendline is breached.

By TradingView - DOGEUSD_2024-10-18 (1D)

On October 18, Dogecoin successfully broke through the upper trendline of the wedge pattern and retested it as support around $0.105. This confirmed the strength of the breakout, setting the stage for further price gains. Analysts now predict that DOGE price could target the next resistance level near $0.19 by the end of 2024, aligning with the 0.786 Fibonacci retracement level.

By TradingView - DOGEUSD_2024-10-18 (5D)

However, Dogecoin’s daily relative strength index (RSI) has surged above 70, signaling overbought conditions. This indicates that a short-term consolidation or correction may occur, which could slow the DOGE price rally in the days ahead. A potential pullback to the 0.236 Fibonacci support level around $0.122 is possible before the next upward push.

Elon Musk and Dogecoin: An Influence of Long-Term Potential

Elon Musk and Dogecoin, and the support provided, have given it remarkable staying power in the volatile world of cryptocurrencies, especially with the huge influence and exposure that Elon Musk has. Although Dogecoin is still down more than 80% from its all-time high in 2021, Musk’s involvement has maintained its relevance. His engagement with the Dogecoin community and his frequent mentions of the meme coin have consistently driven the DOGE price surges.

Looking ahead, Dogecoin’s performance will likely remain tied to Musk’s public endorsements and further developments in the cryptocurrency market. The meme coin’s breakout from the falling wedge pattern suggests there’s potential for further price gains, but investors should remain cautious of overbought conditions that may lead to short-term corrections.