Today’s price increase in Dogecoin is part of a broader uptrend in the memecoin sector. As you can see below, Shiba Inu, Pepe, and other “joker coins” have also experienced massive gains in the last 24 hours.

Traders began flocking to Dogecoin and other memecoins after the sudden and unexpected return of Keith Gill, the man behind the 2021 GameStop stock squeeze, after a three-year absence.

Gill has been at the center of the GameStop story during the pandemic. Reddit investors took action against hedge funds that were squeezing traditional gaming store GameStop as it was thought to fail, causing the price of GME to rise more than 1,000% in under a month.

The GameStop squeeze coincided with the massive rise of memecoins like Dogecoin and Shiba Inu. This indicates a high risk perception among individual investors.

A similar situation occurs in May. Hours after Gill’s return, GameStop stock doubled in value, triggering a rally in the memecoin sector.

The Dogecoin price increase in the last 24 hours is accompanied by DOGE liquidations worth $5.59 million. $3.96 million of these liquidations consist of short positions. When short positions are liquidated, Dogecoin investors who borrowed and sold DOGE are forced to buy back DOGE to protect their positions. This situation pushes the price up.

Meanwhile, investors are increasing their bets on the Dogecoin market despite short liquidations. DOGE futures open interest (OI) increased from approximately $718 million to $807 million in one day. This coincides with an increase in the funding rate from 0.029% weekly to 0.241% weekly.

An increase in open interest (OI) indicates that more positions are being opened, increasing market interest and participation. A positive funding rate generally indicates that demand for long positions exceeds demand for short positions, reflecting an upward trend.

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

An IH&S pattern forms when the price forms three consecutive bottoms. The middle bottom (head) is the lowest and is surrounded by two higher bottoms (shoulders). The pattern resolves after the price breaks above the neckline and rises by the height of the pattern.

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

On the other hand, a pullback below the right shoulder trough at around $0.135 risks pulling the price lower towards $0.122 in May. This level has been acting as support since March.