Musk, social media and politics boost DOGE

The memecoin hits highs of $0.4385, sparking investor fervor amid a climate of optimism.

This Wednesday, Dogecoin (DOGE) once again captured the market's attention by experiencing a notable 7% increase, driven by politics after Donald Trump's recent electoral victory and Elon Musk's active participation in the social network X. This generated a new bullish cycle for the popular cryptocurrency.

Dogecoin is in a clear overbought zone in the short term, with an RSI index of 95.35. / TradingView

DOGE bullish rally driven by politics and social media

The Dogecoin cryptocurrency has seen a resurgence in its value, reaching prices not seen since mid-2021, trading at $0.4385. This significant increase is part of a bullish rally that began in early November, coinciding with Trump's electoral victory. The images shared by Musk on the social network X, related to the phrase "DOGE" and the "department of government efficiency", are key to fueling the buying frenzy, also known as FOMO (fear of missing out).

Increase in trading volume

Dogecoin's trading volume is registering a significant increase, similar to that seen in May 2021, when Musk caused the cryptocurrency to reach historic highs. Currently, the price of DOGE is above the short, medium and long-term moving averages, reinforcing the bullish trend in the market.

Overbought signals and possible corrections

Although Dogecoin is in a clear overbought zone in the short term, with an RSI index of 95.35, suggesting that there could be a correction or consolidation in the coming days, there are no immediate signs of the price retreating. The recent release of inflation data in the United States, which, although showing a slight increase, indicates that the Federal Reserve remains in control. This could open the door to a further interest rate cut in December. Such a cut would be beneficial for cryptocurrencies, adding a positive factor to the market environment.

On-chain data and holder composition

On-chain data reveals that 96% of Dogecoin holders are currently in profit. Furthermore, 62% of the coins are concentrated in large holders, suggesting strong demand from institutional investors. In the last week, transactions exceeding $100,000 were recorded, reaching a total of $25.24 billion.

The renewed interest in Dogecoin, combined with a favorable macroeconomic environment, has led the cryptocurrency to rack up an impressive 442% in gains over the past year. As the market continues to evolve, investors will be on the lookout for any changes that could impact this growth cycle.

Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency markets are highly volatile and can result in significant losses.