Dogecoin (DOGE) saw a significant rise in its price today, bouncing back from a period of decline and posting gains on May 27. This surge in price can be attributed to the unexpected return of Keith Gill, who gained fame for his involvement in the GameStop short squeeze earlier this year. Gill’s comeback reignited interest in memecoins, including Dogecoin, among retail investors.
The price of DOGE dropped to a low of $0.164 before experiencing a nearly 5% spike during trading on May 27. This sudden increase in price may have triggered the liquidation of short positions, resulting in a short squeeze and further boosting prices.
Keith Gill’s return sparked a broader rally in the memecoin sector, with other similar tokens like Shiba Inu and Pepe also experiencing notable increases. This resurgence in memecoins has led to higher trading volumes and positive price movements across the board.
Analyzing Dogecoin’s in/out of the money charts further supports the bullish sentiment in the market. Many Dogecoin holders are currently in profit, with a significant number of profitable positions around or below the current price of $0.171520. This reduces the potential selling pressure, as fewer investors are at a loss and less likely to sell to cut their losses. However, continued rally risks attracting profit-booking bears, which could stall the DOGE price rally.
From a technical perspective, the recent rise in Dogecoin’s price can also be attributed to market dynamics involving short squeezes. In the last 24 hours, traders have liquidated nearly $700,000 worth of short positions, leading them to buy back Dogecoin to cover their positions and pushing the price up. Additionally, the increase in the open interest of DOGE futures and the rise in funding rates indicate growing market interest and participation.
The combination of renewed investor interest and favorable market dynamics likely contributed to the recent rise in Dogecoin’s price.
Another reason for the increase in DOGE price today could be the token’s proximity to breaking out of a bullish technical pattern known as the “Falling Wedge.” This pattern features converging trend lines that connect lower highs and lower lows, forming a narrowing shape that slopes downward. It suggests that while the price is consolidating in a downtrend, bearish momentum is weakening, and a potential reversal to the upside is imminent. Typically, a breakout occurs in the direction of the overall trend, which, in the case of a falling wedge, is upward.
To estimate the price target of a falling wedge pattern, traders measure the widest part of the wedge at the beginning of its formation and project this distance upward from the breakout point to set a potential target. Confirmation of the breakout is often accompanied by an increase in trading volume, indicating stronger market conviction and supporting the likelihood of a successful price reversal.
According to technical analysis rules, the price of Dogecoin could rally over 63% to reach the pattern’s theoretical price target near $0.28.