Dogecoin (DOGE) Price Soars 15% Daily, But is a Correction Coming?

TL;DR

Dogecoin’s price surged to a five-month high, likely fueled by Elon Musk’s social media interaction and discussion of a potential “Department of Government Efficiency (DOGE)” initiative.
Despite bullish sentiment, the asset’s RSI at 78 suggests it may be overbought, raising the potential for a short-term correction.

DOGE’s Bull Run

The biggest meme coin in terms of market capitalization continues its impressive performance. Its price spiked by over 15% in the past 24 hours, currently trading at $0.1646 (per CoinGecko’s data). Several hours ago, DOGE reached almost $0.17, the highest mark observed since the end of May this year. 

Its rally could be attributed to Elon Musk’s interaction on X. On October 28, Tesla’s CEO posted an interesting picture depicting him flexing during a public speech. The photo’s lower part featured the Shiba Inu breed (which resembles DOGE’s logo) striking the same pose all in muscles. 

Musk also keeps talking about establishing a potential Department of Government Efficiency (DOGE) should Donald Trump win the US presidential elections. The division would aim at fair taxation for Americans and will be spearheaded by Tesla’s boss.

Crypto X is rammed with analysts who believe the recent resurgence of Dogecoin is just a warm-up before a gigantic price increase. One example is Mikybull Crypto, who said:

$DOGE god is imminent from now.

The current rally is just a warm-up for a bigger move. pic.twitter.com/Fnz06XIiu6

— Mikybull Crypto (@MikybullCrypto) October 29, 2024

X user Ali Martinez was bullish, too. Earlier this week, he envisioned a spike to as high as $0.175 should the meme coin surpass the resistance zone of $0.143. As mentioned above, DOGE currently trades much higher than the depicted mark. 

A Possible Pullback?

Despite the reigning optimism in the crypto space, some indicators suggest that Dogecoin may experience a painful correction in the short term. 

One example is the Relative Strength Index (RSI), which measures the speed and change of price movements. It varies from 0 to 100, with readings above 70 hinting the asset has entered overbought territory and could be poised for a pullback. 

Currently, the RSI is set at 78.