The price of dogecoin (DOGE), the memecoin that pays tribute to a viral Internet dog, increased 40% during the month of October. The rise of bitcoin (BTC) and the mention of Elon Musk were the catalysts that sparked the bullish rally.
The relationship between the CEO of Tesla and the meme cryptocurrency with the largest market capitalization is not new. For years now Musk flirts with the dog community, after April 2, 2019, on the festive date April Fool’s Day (Fool’s Day) was proclaimed CEO of DOGE. Thus, any mention by the businessman about dogecoin has had a positive impact on its price.
One of the last occurred on October 17. As CriptoNoticias has reported, Musk participated in a Donald Trump presidential campaign rally, where an attendee asked the South African if he would lead the hypothetical Department of Government Efficiency, whose acronym coincides with the ticker of the “DOGE” cryptocurrency.
It was at that moment that the founder of Tesla answered: “Yes, Doge.” This response generated an effect on the price of the asset.
In this framework, and as seen in the following graph of TradingView, DOGE price soared more than 40% in October and currently its price is $0.17.
It should be noted that memecoins are tributes to pets, political or famous figures and do not solve any problem. Generally, they are used for financial speculation and that is why their price usually rises or falls in a matter of seconds.
In addition to Musk’s impact, another factor to take into account is the rise in bitcoin so far this month. Generally, this happens because the digital currency created by Satoshi Nakamoto expands optimism in the market and awakens investors’ appetite for riskwhich motivates the demand, in this case, for DOGE.
Historically, October is a favorable month for BTC. That is why traders refer to it as “uptober” (bullish October, in Spanish).
As of this article’s publication, the price of bitcoin has risen more than 12% so far this month. At the moment, Its price is $71,716.
Bullish outlook for DOGE
“This dog wants to run,” says Mike Fay, cryptocurrency market analyst, in a report that he shared last weekend about memecoin.
Active addresses have started to risewhich predicts an increase in the price of the digital asset and adds: “Daily active addresses are important because they show the closest we have to users.”
Although each investor can have more than one address, It is an indicator of the activity of a cryptocurrency in the market.
For his part, for the specialist known as Rekt Capital“DOGE’s macro downtrend has ended and it is slowly starting its new macro uptrend.”
To argue his opinion, he shared a graph showing how he broke that macro downtrend (blue line) and retested it as support in recent months (purple circle).
Finally, he warns that If it fails to stay above the $0.12 support, DOGE could pull backjust as happened on other occasions.
In trading, support is defined as a type of floor with which the price of an asset collides to rebound and then stabilize. Due to market psychology, the price of a cryptocurrency does not usually fall beyond this area, because it would be undervaluing it.