Dogecoin price rose for five consecutive days, reaching its highest point since November last year. The DOGE token has jumped by 30% from its lowest level this year, bringing its market capitalization to over $25 billion. So, is this the start of a new Dogecoin rally or a dead-cat bounce?
Dogecoin Price Rises as Meme Coins Rebound
The DOGE token rose as meme coins rebounded sharply in the past few days. Most of these coins, including popular names like Pepe Coin, Shiba Inu, Bonk, and Official Trump, have rebounded in the past few days, with their market capitalization rising to over $52 billion.
Dogecoin price rose as futures open interest continued to rise, moving from a low of $1.27 billion on December 9 to $1.8 billion today, its highest level since October 28. The daily trading volume of DOGE jumped to over $3.24 billion, up sharply from a low of $1.17 billion in December.
The token also rose as DOGE ETF inflows rose by $2.3 million on Friday, bringing cumulative net inflows to $4.64 million. Its funds now hold $8.34 million, a tiny amount for a coin with a market capitalization of over $20 billion.
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One main reason for the Dogecoin price rally is that the Bitcoin price has moved above the key $91,000 resistance level. It is common for meme coins to rally when Bitcoin and the broader futures open interest are soaring.
Also, the token is rising as investors buy the dip after it plunged by double digits in 2025. It dropped by over 62% from its peak in September to its trough in December. As such, it is common for investors to buy an asset after it has plunged hard over a specific period.
The coin has also risen as the January Effect continued. The January Effect is a phenomenon in which financial assets jump sharply in January as investors begin buying. We experienced this surge happening in January last year, towards Donald Trump’s inauguration.
DOGE Price Technical Analysis
The daily timeframe chart also explains why the DOGE price is rising. As the chart above shows, it happened after the token formed a giant falling wedge pattern, a common bullish reversal sign.
Dogecoin price has now moved above the upper side of the wedge, while the Supertrend indicator has turned green. It also moved above the 50-day Exponential Moving Average (EMA).
The token has also hit the target of the falling wedge pattern at $0.1540. This target is estimated by measuring the widest part of the wedge and the same distance from the breakout point.
Top oscillators such as the Chaikin, Relative Strength Index, and On-Balance Volume (OBV) have all pointed upward. Therefore, the most likely scenario is where the coin continues rising as FOMO continues.
However, the persistent risk is that the ongoing rally is a dead-cat bounce, which could lead to a retreat in the coming weeks.
