How far can an Elon Musk inspired rally go?

Elon Musk seals Twitter deal, Dogecoin (DOGE) price embarked on a multi-year price breakout amid high retail excitement.

Once again, all eyes are on the top meme coin, Dogecoin, with the price of DOGE up 11% over the past 24 hours. The bullish momentum for DOGE price resumed as Elon Musk closed the long-awaited Twitter deal.

This is not the first time and certainly not the last time that Musk-related Dogecoin has seen a massive increase in price. news Internet takes over. Throughout 2021, the price of DOGE relied on the attention of the self-proclaimed dogfather (Elon Musk) for timely and significant gains.

Now the important question remains – how far can DOGE bulls extend gains for the price of Dogecoin?

Dogecoin with high in profit, volume and excitement

Traders and investors are not giving up on DOGE’s price despite Mem Coin being down 89.72% from its all-time high. Recent Musk-fuelled gains have reversed DOGE price losses recorded over the past five months.

A look at the Dogecoin social metrics presented that the weighted sentiment in the meme coin had reached a four-month high. Social volume showed a healthy increase with the DOGE price charting a vertical recovery as well.

Dogecoin DOGE Price
Source: SanBase

The DOGE Spike Monthly MVRV is showing signs of a good long-term reversal from the $0.065 lower range. However, with a pullback already followed by an increase in the daily and weekly MVRV ratio, it presented some doubts about the recent surge in prices.

Nevertheless, as DOGE price rose above the $0.075 mark for the first time in ten weeks, DOGE whale trading and trading volume surged to August levels.

Dogecoin DOGE Price
Source: SanBase

There has also been a significant increase in the volume and volume of large trades, indicating that large DOGE players are entering the market.

Dogecoin DOGE Price
Source: In the Block

How long will the DOGE price frenzy last?

In the past, the price of DOGE has often reacted very well to social excitement, especially when news related to Elon Musk hit the Internet. However, a look at DOGE’s historical price action shows that gains driven by social sentiment are hardly sustained.

Dogecoin DOGE Price
DOGE/USD 1-Day Chart | Source: TradingView

In May 2021, after Elon Musk called Dogecoin “real in dollar terms,” ​​the price of DOGE increased by almost 50%. However, the gains were short-lived and a quick comeback soon followed.

At press time, DOGE was trading at $0.0761 with a daily gain of 11.54% and a weekly gain of 26.86%. A look at the DOGE daily RSI shows that it is in the overbought zone.

One worrying point, however, was that the daily active addresses did not show any major jump despite a double-digit increase in prices. In addition, the percentage of total supply of stablecoins by whales of over USD 5 million was also at its lowest level.

Dogecoin DOGE Price
Source: SanBase

Going forward, Dogecoin price may face stiff resistance at the $0.087 mark, while the $0.068 mark may act as a string of support as per data from IntoTheBlock’s In and Out of Money indicator. For now, DOGE price action has decent retail volume to support the uptrend, with a 150% increase in 24-hour trading volume.

In case of a bullish invalidation, a return to the lower area of ​​$0.068 is possible.

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