How Far Can the Elon Musk Induced Rally Go?

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Dogecoin (DOGE) price has embarked on a multi-year price breakout amid high retail euphoria as Elon Musk seals the Twitter deal. 

Once again, all eyes are on the top meme coin, Dogecoin, with the DOGE price gaining 11% in the last 24 hours. As Elon Musk closed the long-awaited Twitter deal, bullishness resumed for the DOGE price. 

This isn’t the first and definitely not the last time that Dogecoin price has witnessed a massive uptick as Musk-related news takes over the internet. Throughout 2021, DOGE price relied on attention from the self-proclaimed Dogefather (Elon Musk) for occasional and significant gains. 

The crucial question now remains – how far can DOGE bulls propel gains for Dogecoin price?

Dogecoin with high on gains, volumes, and euphoria 

Traders and investors aren’t giving up on DOGE price despite the meme coin being down 89.72% from its all-time high. The recent Musk-fueled gains have reversed DOGE price losses registered over the last five months. 

A look at Dogecoin social metrics presented that weighted sentiment in the meme coin had spiked a four-month high level. Social volumes showed a healthy uptick alongside  DOGE price charting a vertical recovery. 

Source: Sanbase 

DOGE spiking monthly MVRV showed signs of a good long-term reversal from the lower $0.065 range. However, with daily and weekly MVRV ratios already noting a pullback after spiking, the same presented some doubts about the recent surge in price. 

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

Dogecoin DOGE price
Source: Sanbase 

The number of larger transactions and larger transaction volumes also noted a considerable rise indicating bigger DOGE players making a move in the market. 

Dogecoin DOGE price
Source: Into The Block 

How long will DOGE price mania last?

In the past, DOGE price has often reacted extremely well to social euphoria, especially when Elon Musk-related news hits the internet. However, a look at DOGE historical price action suggests that social sentiment-driven gains hardly sustain. 

Dogecoin DOGE price
DOGE/USD 1-day chart | Source: Trading View 

In May 2021, after Elon Musk called Dogecoin “as real as the dollar,” DOGE price skyrocketed by almost 50%. The gains, however, were short-lived and a quick pullback followed soon. 

At press time, DOGE price was at $0.0761, noting 11.54% daily and 26.86% weekly gains. A look at DOGE daily RSI presented that it was in the overbought zone. 

However, a worrying factor was that daily active addresses showed no major spike despite the price noting double-digit gains. In addition to that, its percentage of stablecoin total supply held by whales with over 5 million USD also stood at the lowest levels.

Dogecoin DOGE price
Source: Sanbase

Going forward, Dogecoin price can face stiff resistance at the $0.087 mark, while the $0.068 mark can act as string support as per data from IntoTheBlock’s In and Out of Money indicator. For now, DOGE price action had decent retail volumes to support the uptrend, with 24-hour trade volumes spiking by 150%. 

In case of a bullish invalidation, a pullback to the lower $0.068 zone is plausible. 

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