Significant developments in the cryptocurrency market continue to make headlines. Accordingly, Dogecoin price surged today, increasing by approximately 9.5% in the last 24 hours to reach $0.151 on May 14. By doing so, the memecoin outperformed the broader cryptocurrency market, which had a return of around 2.75% during the same period.
Why is Dogecoin Rising?
Today’s price increase in Dogecoin is part of a broader upward trend in the memecoin sector. For instance, Shiba Inu, Pepe, and other memecoin projects also experienced significant rises in the last 24 hours, as shown below. Investors began flocking to Dogecoin and other memecoin projects following the sudden and unexpected return of Keith Gill, the person behind the 2021 GameStop short squeeze, after a three-year hiatus.
Gill was at the center of the GameStop process during the pandemic. Reddit investors turned the tables on hedge funds that were shorting the supposedly failing brick-and-mortar game store, leading to GME’s price rising over 1,000% in less than a month.
The duration of the short squeeze in GameStop coincided with significant increases in memecoin projects like Dogecoin and Shiba Inu, indicating increased risk appetite among individual investors. This is similar to the event in May when GameStop’s stock value doubled just hours after Gill’s return, triggering a rise in the memecoin sector.
DOGE Chart Analysis
From a technical perspective, the gains in DOGE are part of a rise developing within a formation that appears to be an inverse head-and-shoulders (IH&S) pattern. An IH&S pattern develops when the price forms three consecutive troughs; the middle trough (head) is the lowest and is flanked by two higher troughs (shoulders). This situation resolves when the price breaks above the neckline and rises by the height of the formation.
As of May 14, DOGE was entering the penultimate stage of the formation and was poised to form the right shoulder with a decisive close above the neckline around $0.166. In this case, DOGE’s IH&S target for May would be around $0.227, a 55% increase from the current price level.
Conversely, a pullback below the right shoulder trough around $0.135 would risk the price falling to $0.122 in May. This level has served as support since March.
