Dogecoin (DOGE), the Shiba Inu-themed memecoin, has experienced a significant surge of over 17% in the past week, fueled by a combination of positive cryptocurrency market sentiment and renewed support from Tesla CEO Elon Musk.

Dogecoin’s Riding the Bitcoin Wave

The overall positive sentiment in the crypto market, with Bitcoin surpassing the $73,000 mark, is lifting all boats, with memecoins like DOGE catching the positive wave. As investors become more optimistic about the future of cryptocurrencies, they’re allocating funds across the market, including memecoins known for their volatility.

Elon Musk Reignites the DOGE Payment Spark

Adding fuel to the DOGE fire, Elon Musk, a long-time supporter of the memecoin, recently reignited investor enthusiasm. During a visit to Tesla’s Berlin Gigafactory, Musk responded positively to a question about the possibility of accepting Dogecoin as payment for Tesla cars “at some point.” While not offering a concrete timeline, Musk’s comments were enough to send DOGE prices jumping by nearly 10%.

Analysts Caution Amidst the Hype

Despite the recent surge, technical analysis paints a somewhat cautious picture for DOGE. Experts have identified a declining volume trend, which can be a warning sign of waning buying pressure. Additionally, DOGE seems to be struggling to break through a resistance level around $0.1439. This, coupled with the declining volume, suggests that the current momentum might be temporary.

DOGE/USD Technical Analysis

• Support: The current support level for DOGE sits around $0.15. This is a critical zone as a price drop below this level could indicate a bearish trend and potentially lead to further declines.
• Resistance: The resistance level to watch is approximately $0.20. A convincing breakout above this zone could signal a continuation of the uptrend.
• Moving Averages: The 50-day and 200-day moving averages are currently sloping upwards, indicating a long-term bullish trend. However, a break below these moving averages could signal a shift in momentum.