Dogecoin Eyes 40% Boom Thanks to Elon Musk Hopium

Dogecoin (DOGE) has surged by approximately 25% week-to-date, reaching $0.136 on Oct. 18, its highest level in three months. Meanwhile, its rally has outpaced major cryptocurrencies, such as Bitcoin (BTC) and Ethereum (ETH), which have gained by over 12% and 9% during the same period.

The broader crypto market has benefited from growing risk-on sentiment, partly driven by better-than-expected earnings reports on Wall Street. Major stock indices like the S&P 500 have flirted with record highs, spilling optimism into riskier assets like cryptocurrencies.

Elon Musk is Behind Dogecoin’s Outperformance

Dogecoin’s performance appears largely tied to the hype surrounding Elon Musk.

On Oct. 15, Musk tweeted, “D.O.G.E will fix it,” in response to a Los Angeles Times article discussing California’s restrictions on his SpaceX company.

D.O.G.E will fix it 🪓

— Elon Musk (@elonmusk) October 15, 2024

Musk’s comment referred to a proposed Department of Governmental Efficiency (D.O.G.E.), a government commission that would streamline bureaucracy if Donald Trump wins the upcoming election.

Musk further fueled speculation during an Oct. 17 town hall event, where he backed Trump and mentioned the idea of a government agency named after the meme-inspired cryptocurrency.

LISTEN: Elon Musk explains how the Department of Government Efficiency (DOGE) will give power back to the people:

“They seem to forget the money being spent is YOUR MONEY and if it’s not being spent in a way that’s beneficial to the American people, it’s a misuse of funds.” pic.twitter.com/hmu2ZuRlbn

— Benny Johnson (@bennyjohnson) October 17, 2024

The crowd’s reaction—and Musk’s direct mention of “D.O.G.E.”—seemingly contributed to a nearly 9% price jump for Dogecoin following the event.

Dogecoin’s Technical Analysis: A 40% Boom Underway

From a technical perspective, Dogecoin’s bullish momentum shows potential for further upside.

The cryptocurrency recently broke out of its prevailing falling wedge pattern, characterized by two descending, converging trendlines. A falling wedge pattern typically resolves when the price climbs decisively above its upper trendline and rises to a level at a length equal to the maximum distance between the upper and lower trendlines.

As of Oct. 18, DOGE had entered the breakout stage of its falling wedge pattern, indicating a potential 40% price increase by the end of 2024. That puts its upside target at around $0.192, aligning with the 0.86 Fibonacci level from its previous decline.