Key takeaways:
Dogecoin (DOGE) jumped 2.5% to $0.20 as the market’s attention turned to Elon Musk’s latest X post, featuring the memecoin mascot Shiba Inu. DOGE price surged 29% in response.
The move extended DOGE’s sharp rebound from its recent low of $0.13, its lowest level since April, marking a 55% recovery in just two weeks.
Musk’s tweets famously fueled DOGE’s explosive 2021 rally from mere cents to nearly $0.73.
Now, with sentiment improving and multiple technical indicators flashing bullish signals, the top memecoin appears poised to extend its recovery in the second half of October.
DOGE’s A&E indicator hints at 25% gains next
Dogecoin is forming an Adam and Eve double-bottom pattern, a bullish reversal setup where a sharp “V”-shaped drop (Adam) is followed by a rounded recovery (Eve). This pattern signals that selling pressure is fading while buyers are regaining control.
DOGE’s neckline sits near $0.216, and a confirmed breakout above this level could trigger a move toward $0.260, about 25% higher than current prices.
The target aligns with the pattern’s measured move projection and coincides with a key technical confluence zone. It also matches the 0.382 Fibonacci retracement level on DOGE’s weekly chart, as shown below.
The rebound prospects gain further strength as DOGE rebounds from a support confluence comprising an ascending trendline and a 0.236 Fib line, reinforcing the idea that buyers are defending lower levels, while eyeing $0.26 as the interim upside target.
Short squeeze can help DOGE reach $0.26 target
Futures data shows a heavier concentration of short liquidations between $0.215 and $0.27, while long liquidation levels remain relatively flat below $0.18.
This imbalance suggests a lower downside risk, with fewer leveraged longs positioned to trigger significant sell pressure. Conversely, the upside has a dense liquidity wall of shorts waiting to be squeezed.
Related: DOGE holders are buying dips: Is $1.60 by 2026 realistic?
Therefore, a breakout above the $0.216 neckline could unleash a wave of short liquidations, accelerating a move toward $0.26 as bearish traders are forced to buy back into the rally.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
