Important points:
Dogecoin (DOGE) rose 2.5% to $0.20 as Elon Musk’s latest X post featuring the memecoin’s mascot Shiba Inu caught the market’s attention. Following this, DOGE prices rose by 29%.
The move extends DOGE’s sharp rebound from recent lows of $0.13, its lowest since April, marking a 55% recovery in just two weeks.
Musk’s tweet famously fueled DOGE’s explosive 2021 rally from just a few cents to nearly $0.73.
Now, the top meme coin appears poised to extend its recovery into the second half of October, as sentiment has improved and multiple technical indicators are flashing bullish signals.
DOGE’s A&E index suggests next 25% rise
Dogecoin has formed an Adam and Eve double bottom pattern, a bullish reversal setup with a sharp “V” shaped decline (Adam) followed by a rounded recovery (Eve). This pattern indicates that selling pressure is waning while buyers are regaining control.
DOGE’s neckline is located around $0.216, and a confirmation above this level could trigger a move towards $0.260, around 25% higher than the current price.
The targets match the measured movement predictions of the pattern and coincide with the major technological confluence zones. It also coincides with the 0.382 Fibonacci retracement level on the weekly chart of DOGE, as shown below.
As DOGE rebounds from the support confluence of the uptrend line and the 0.236 fib line, the prospect of a pullback becomes even stronger, reinforcing the idea that buyers are defending the lower levels while aiming for $0.26 as a tentative upside target.
Short squeeze could help DOGE reach $0.26 target
Futures data shows that short-term liquidations are more concentrated between $0.215 and $0.27, while long-term liquidation levels remain relatively flat at below $0.18.
This imbalance suggests less leveraged longs and lower downside risk, which can cause significant selling pressure. Conversely, on the upside there is a thick wall of liquidity of shorts waiting to be compressed.
Related: DOGE holders are buying the push: Is $1.60 realistic by 2026?
Therefore, a break above the $0.216 neckline could trigger a wave of short-term liquidations and accelerate the move toward $0.26 as bearish traders are forced to buy back on the rebound.
