The summer of Dogecoin may have arrived, as the cryptocurrency market’s number one meme coin, Dogecoin, is starting to show signs of a comeback. The reason? Once again, Elon Musk, if you can believe it. But it’s not just Elon’s fault – looking at the charts, traders may have good reason to believe that the good times for Dogecoin will continue. And it’s not just Dogecoin’s fault, as Ethereum’s bullish momentum is also increasing.
Dogecoin rose 6.32% to $0.20 today before pulling back to the current $0.19552, breaking through the $0.19 resistance level. Elon Musk's attempt to publicly reconcile with Donald Trump eased political tensions and speculation on the approval of a Dogecoin ETF intensified. Trading volume approached $1.65 billion, up 827% from the previous day, confirming the real interest behind the breakout.
The main catalyst for today's gains appears to be Elon Musk's apology to Donald Trump, who said his recent comments were "over the top," marking a significant thaw between the two. The settlement is significant for Dogecoin investors, who typically react strongly to news related to Musk, as Trump previously threatened to cancel a $22 billion contract with SpaceX. Musk's conciliatory tone reduces the systemic risk of his investment projects and indirectly boosts confidence in Dogecoin, as the Tesla CEO has historically had a close influence on Dogecoin's price movements. Dogecoin surged 6% to $0.199 during the session, which coincided with Musk's public statement.
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Adding fuel to the rally, Bloomberg analysts led by Eric Balchunas raised the probability of approval of a Dogecoin spot ETF to 80%, higher than the 75% for Cardano or Polkadot. The attention of institutional investors marks a paradigm shift for Dogecoin, which has traditionally been seen as a retail-driven meme asset. The launch of CFTC-regulated futures strengthens the feasibility of its ETF approval, potentially opening the door for pension funds and well-funded institutional portfolios to have the opportunity to invest in Dogecoin.
Technical analysis shows several bullish signals across multiple timeframes. Dogecoin (DOGE) is attempting to break above its 50-day EMA (average price over the past 50 days) at $0.1933, with the Relative Strength Index (RMI) in neutral territory at 48 points. The Average Directional Index (ADI), which measures the strength of a particular price trend, is at 21 points, suggesting that the recent price correction is severely weakening the bearish trend that has driven the price of Dogecoin from $0.25 to $0.16 over the past few weeks.
Dogecoin price trend. Image source: TradingView
Overall, the Crypto Fear & Greed Index has climbed to 72 (solidly in “greed” territory), up from 57 last week, which favors risk assets. The broader memecoin sector has outperformed, with the SPX6900 token up 80% in the past 30 days, and Trump-themed coins and Dogecoin imitation coins have also surged.
DOGE has immediate resistance around $0.214. The golden cross pattern (50-day moving average above 200-day moving average) is still in play, but this gap stopped closing on May 30, so the short-term bullish trend should continue for a few more days before the medium-term bullish trend is confirmed.
Next key focus: Resistance at $0.214. Support at $0.186
