Dogecoin (DOGE) price is up today, rising by approximately 9.5% in the last 24 hours to reach $0.151 on May 14. In doing so, the memecoin has outperformed the broader cryptocurrency market, whose returns in the same period come to be around 2.75%.

DOGE/USD versus TOTAL crypto market capitalization daily performance chart. Source: TradingView

Return of memecoin mania (and Keith Gill)

Dogecoin’s price surge today is part of a broader uptrend in the memecoin sector. For instance, Shiba Inu (SHIB), Pepe (PEPE), and other so-called “joke cryptocurrencies” have also seen tremendous rallies in the last 24 hours, as shown below.

Memecoin sector performance on hourly, daily, and weekly t 

Traders started flocking to Dogecoin and other memecoins after the sudden and unexpected return of Keith Gill, the person behind the 2021 GameStop short squeeze, after a three-year hiatus.

Gill was central to the GameStop saga during the pandemic. Reddit traders turned the tables on hedge funds shorting the supposedly failing brick-and-mortar game store, leading to GME’s price soaring over 1,000% in under a month.

The duration of the GameStop short squeeze coincided with the massive surge in memecoins like Dogecoin and Shiba Inu, indicating a heightened risk sentiment among retail investors. 

GameStop stock daily performance chart. Source: TradingView

This is similar to what’s transpiring in May, with GameStop stock value doubling hours after Gill’s return, triggering the memecoin sector rally.

Dogecoin shorts get rekt

Dogecoin’s price gains in the last 24 hours further accompany DOGE liquidations worth $5.59 million, out of which $3.96 million are short. When short positions are liquidated, Dogecoin traders who borrowed and sold DOGE must buy it back to cover their positions, which pushes its price up.

Crypto liquidation heatmap 24-hours. Source: Coinglass 

Meanwhile, traders are increasing their bets on the Dogecoin market despite the short liquidations, with the DOGE futures open interest (OI) rising from around $718 million to over $807 million in a day. This coincides with an increase in funding rates from 0.029% per week to 0.241% per week. 

DOGE futures OI and funding rate. Source: Coinglass

Increasing open interest (OI) signifies that more positions are being opened, indicating growing market interest and participation. A positive funding rate usually suggests that the demand for long positions outweighs that for short positions, reflecting bullish sentiment.

DOGE price chart hints at IH&S

From a technical perspective, DOGE’s gains today are part of a bounce developing inside what appears to be an inverse-head-and-shoulders (IH&S) pattern.

An IH&S pattern develops when the price forms three consecutive troughs, the middle trough (head) being the lowest, flanked by two higher troughs (shoulders). It resolves after the price breaks above the neckline and rises by as much as the pattern’s height.

DOGE/USD four-hour price chart. Source: TradingView

As of May 14, DOGE was entering the pattern’s penultimate stage, forming the right shoulder with a potential breakout if the price closes decisively above the neckline at around $0.166. In that case, DOGE’s IH&S target is around $0.227 for May, up 55% from the current price level.  

Related: Bitcoin price shows strength as investors anticipate return of money printing

Conversely, a pullback below the right shoulder’s trough at around $0.135 would risk sending the price down toward $0.122 in May. This level has been serving as support since March.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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