Dogecoin (DOGE), the largest memecoin by market capitalization, has rallied more than 10% in the past 24 hours as memecoins recover across the board.

Currently trading at $0.1262, DOGE price has reached its highest value since Sept. 29, marking a 44% climb from its local low of $0.08888 reached on Sept. 6.

DOGE/USD daily chart. Source: TradingView

Trading activity has also spiked up in tandem with DOGE’s price surge. DOGE’s spot trading volumes topped $1.8 billion on Oct. 16, rising by 95% over the last 24 hours and 165% over the last seven days.

Its market capitalization has also reclaimed the $18 billion mark, cementing its position as the largest memecoin in the world, according to data from CoinMarketCap.

It is also the most traded memecoin on Oct. 16, outpacing Pepe (PEPE) by over $600 million in volume.

What are the factors behind DOGE’s recent bullish momentum?

DOGE price seeks to end a multimonth downtrend

Several crypto traders expect Dogecoin to build on the current momentum to initiate a sustained recovery.

“Doge is ready to run,” pseudonymous altcoin analyst Alstreet Bets wrote in an Oct. 16 post on X.

Meanwhile, crypto technical analyst Mikybull Crypto shared a chart showing DOGE price breaking above a 180-day descending trendline, with $0.13 and $0.14 being key resistance levels to watch.

“It looks like god candle is coming.”

The multimonth descending trend line at $0.1047 is acting as immediate support for the memecoin. The moving average convergence divergence (MACD) indicator has just produced a bullish signal.

This happened when the MACD line (blue) crossed above the signal line (orange), suggesting that market conditions had flipped in favor of the upside.

DOGE/USD weekly chart. Source: TradingView

It is worth noting that DOGE’s latest rally has seen it flip crucial levels into support, including the 50-week and 100-week simple moving averages (SMAs) at $0.1196 and $0.970, respectively. Increased buying from these buyer congestion zones will likely push DOGE price higher toward the March 18 high of $0.2286.

Meanwhile, futures traders are doubtful of a quick rebound, with $587,344 in short positions at risk if the price recovers to $0.130, where the 200-day SMA currently sits. A further 10% decline down to $0.114 would wipe out $1.73 million in long positions.

DOGE exchange liquidation heatmap. Source: CoinGlass

Related: Grayscale puts DOGE, Worldcoin on list of 35 potential crypto products

Increasing OI backs DOGE’s recovery

The surge in Dogecoin’s price on Oct. 14 comes after a sharp rise in its open interest (OI).

Open interest is a key metric that traders and analysts use to assess market sentiment and anticipate future price movements.

DOGE’s OI rose to $755.5 million on Oct. 16, approximately 27.3% higher than the $593.7 million recorded a day prior on Oct. 15, according to CoinGlass data.

DOGE open interest across all exchanges. Source: CoinGlass

Additional data from CoinGlass reveals increasing demand for leveraged long positions in DOGE over the last few days, as indicated by the perpetual futures funding rate.

DOGE average perpetual contracts 8-hour funding rate. Source: CoinGlass

Note that the current 0.0102% eight-hour rate translates to a 0.2142% cost over a seven-day period, which is significant for traders building futures positions. Typically, when there is an imbalance driven by excessive optimism, the rate could easily exceed 1% per week over the next few days.

This signaled sustained bullish sentiment, with traders willing to pay more to maintain long positions, ultimately driving DOGE prices higher.