Dogecoin's trading volume doubles, price rallies 8% on bullish sentiment

Dogecoin's trading volume has surged, doubling this week to exceed $1.15 billion, reinforcing its position as the leading meme coin among traders. This surge has sparked increasingly optimistic predictions for Dogecoin's price, driving an 8% rally in early Thursday trading. The cryptocurrency is benefiting from a favorable environment, with market headwinds beginning to dissipate following a hawkish but uncertain Federal Open Market Committee (FOMC) meeting and anticipated trade agreements.

Traders are positioning for a significant rally in Dogecoin, as indicated by a daily long-to-short ratio of 2.27, with 70% of traders betting on a price increase. The funding rate, which briefly dipped into negative territory, has returned to neutral and is poised to turn positive. This suggests growing confidence among investors in a bullish move for Dogecoin. If this momentum continues, shorts could face forced buybacks, driving the price higher.

The renewed bullish sentiment could propel Dogecoin toward the upper resistance of the descending channel that has defined its multi-month downtrend. This week's surge may be the first leg of a 30% climb to $0.23, driven by a rebound from a long-term support trendline marking bottoms since mid-2024. Momentum indicators further support this outlook, with the Moving Average Convergence Divergence (MACD) on track for a golden cross, signaling a potential long-term trend shift. The Relative Strength Index (RSI) is also trending upward toward neutral after an extended stint in bearish territory, indicating building buying pressure.

If this momentum holds, a breakout could ignite a push toward $0.44, marking a potential 135% gain from current levels. However, a push to a $1 Dogecoin price seems unlikely in the near term, especially as economic concerns tied to US trade relations cast a shadow over risk assets. The Dogecoin Fear and Greed Index stands at 57, indicating a state of greed among investors.