Dogecoin experienced a 17% increase on Monday, reaching an intraday high of $0.21, recovering from a sharp decline that pushed the meme coin to a three-month low. The token had lost 33% of its value in the last week and hit a bottom at $0.18 on October 12. Despite Monday's gains, Dogecoin remains 54% below its all-time high of $0.46, reached in December.
The rebound was part of a wider recovery in the cryptocurrency market, triggered by President Donald Trump's remarks. Trump posted on Truth Social that the United States government was negotiating with China on proposed 100% tariffs on imported rare earth metals. The tariffs, scheduled to begin on November 1, had rattled global markets and raised concerns about escalating trade tensions between the world's two largest economies.
Crypto Market Shows Strength Across Major Assets
The clarification by Trump, which alleviated any anticipation of a complete trade war, led to a fresh surge in the purchasing of digital assets. Bitcoin rose once again above $115,000, and Ethereum and BNB recorded increases of 9% and 16%, respectively. The rally extended into the meme coin industry, with the total cryptocurrency market capitalization again surpassing the $4 trillion threshold.
Traders reported that Dogecoin not only has a better sentiment in the market, but it also has high conviction amongst its holders. CoinGlass data indicated a significant transfer of tokens from exchanges. Dogecoin has experienced 10 consecutive days of net outflows since the start of October, totaling more than $440 million.
Dogecoin outflow: Coinglass
Outflows of exchange are usually a sign that investors are moving their investments to self-custody wallets. This activity is an indication of confidence in the long-term outlook of the asset, which in turn decreases the pressure to sell in the short term. The supply of tokens on exchanges is reduced when the tokens are withdrawn, and this may contribute to the price increasing if demand remains constant.
Technical Indicators Point to Further Upside Potential
The technical analysis of the Dogecoin 4-hour chart indicates that it has formed a bullish pennant pattern. This structure is formed when an asset experiences a steep rise in price, followed by consolidation. Breakouts from such patterns often lead to continuation of the upward trend.
Dogecoin on 4-hour chart
Dogecoin was also testing the upper limit of the pennant formation at the level of $0.21. The momentum indicators suggest that the token has a promising future ahead. The MACD line has now crossed above the signal line, indicating that momentum is shifting towards buyers. The RSI indicator shows that it lies close to the neutral territory, and it has the opportunity to gain further, potentially increasing to an overbought level.
Dogecoin RSI chart
Analysts suggest that Dogecoin may target $0.25 in the next price increase, representing a 19% rise from its current value. This objective aligns with the 200-day simple moving average, one of the primary technical indicators closely monitored by traders. But any slip below the bullish-supportive level of $0.20 would invalidate the bullish formation and reverse the bearish formation.
