Dogecoin Stages Epic Comeback with 11% Surge, Adding $2.5B in Market Cap After Elon Musk Latest Remarks

Dogecoin has experienced a dramatic comeback today, posting over 11% gain at press time to trade above $0.1745.

Market participants have linked the sudden uptrend to recent remarks by Elon Musk on Joe Rogan’s podcast. Musk notably discussed “DOGE,” an acronym for the “Department of Government Efficiency,” prompting renewed interest in the digital currency Dogecoin.

This development has increased Dogecoin’s price substantially at a time when other assets are still in the red.

For context, Musk elaborated on the concept of the Department of Government Efficiency during his conversation with Rogan. He framed the idea as a response to the growing federal bureaucracy, which he believes stifles innovation and growth.

In September, Musk revealed that a dog-themed mascot would represent the department, further linking the concept to Dogecoin.

Dogecoin Adds $2.5B in Market Cap

An analyst observed that Dogecoin’s market cap added approximately $2.5 billion during the day amid the Musk remark, pushing the total valuation up by to $25.2 billion. 

DOGE added about $2.5B in mc on the day 📈

Up 9% to $25.2B mc

And the meme leader looks ready to rip… pic.twitter.com/mVvPR9EKa2

— TylerD 🧙‍♂️ (@Tyler_Did_It) November 5, 2024

Potential Dogecoin Movements

Separately, an analyst highlighted how the U.S. election activities impacted trading on the broader market while Dogecoin managed to break out. According to the shared chart, Dogecoin’s price followed a descending channel from October 29 to November 3. 

However, on November 4, the coin surged above the upper boundary of that channel, suggesting a possible bullish trend. This breakout saw a 7% price jump, with the analyst forecasting a further 24.14% increase to $0.0379.

Despite these gains, some caution is warranted. Analyst Ali Martinez flagged the TD Sequential indicator, which suggests a potential market correction on the 4-hour timeframe. With Dogecoin trading at $0.1745, the indicator pointed to a likely retracement to $0.156. 

The TD Sequential presents a sell signal on the #Dogecoin $DOGE 4-hour chart, anticipating a correction to $0.161 or $0.156! pic.twitter.com/q8CRhYSZR4

— Ali (@ali_charts) November 5, 2024

Overbought Signals Observed

Technical indicators also suggest that Dogecoin may be entering overbought territory, raising concerns about a short-term pullback.

The Bollinger Bands, which measure price movements relative to volatility, showed Dogecoin touching the upper band. This signals that, while the coin is in an uptrend, it could face consolidation or a price pullback soon.

The Relative Strength Index (RSI) also supports this cautious outlook. The RSI stood at 69.27, approaching the typical overbought threshold of 70.

While this indicates strong momentum, it also suggests that further gains may be limited. If the RSI surpasses 70, traders may anticipate an increased risk of price correction, consistent with overbought conditions seen in other markets.