Dogecoin beats Bitcoin in price stability amid crypto trading lull

Volatility in Dogecoin (DOGE), the largest meme cryptocurrency by market value, has dwindled so much that it now looks more stable than the digital asset industry leader, bitcoin (BTC).

According to TradingView, DOGE's annualized 30-day realized, or historical, volatility was 30% at press time, notably lower than Bitcoin's 35%. Realized volatility is calculated as the standard deviation of the daily percentage change in an asset's price over a specific period.

DOGE has historically been more volatile than bitcoin, scaring risk-averse investors, understandably so, as BTC has been around since 2009 and has evolved as a macro asset, with increasing institutional participation over the past three years. DOGE, meantime, has been seen as a non-serious crypto project since its inception in 2013.

BTC's 30-day realized volatility has dropped below that of DOGE, a rare event in the crypto market. (TradingView/CoinDesk) (TradingView/CoinDesk)

The meme coin's new-found status as a less volatile asset shouldn't be taken to imply market maturity, and probably stems from a lack of investor interest in alternative cryptocurrencies.

Bitcoin's dominance rate, or the share in the total crypto market, has surged to 50% from nearly 40% this year, a sign of liquidity being drained from alternative cryptocurrencies and into bitcoin. While the BTC price has gained 60% this year, DOGE has lost just over 12%, CoinDesk data show.

Key liquidity metrics like the aggregate 1% market depth tell the same story. That metric measures the bids and asks within 1% of the mid-price for all order books on major crypto exchanges.

The 1% market depth for altcoins is significantly lower than that for BTC and ETH. (Kaiko) (Kaiko)

The aggregate 1% market depth for the top 10 altcoins was well below that of Bitcoin and ether at the end of last month, according to data tracked by Paris-based Kaiko.

There has been a market-wide decline in activity, with trading volumes in the spot market hitting a four-year low of $475 billion in August.

The low liquidity in DOGE and other coins is consistent with the murky regulatory outlook for smaller cryptocurrencies. Early this year, the U.S. Securities and Exchange Commission (SEC), in its lawsuit against leading digital assets exchanges Coinbase and Binance, referred to several altcoins as securities. DOGE and SHIB were not mentioned, but potential stricter regulations for altcoins could eventually affect meme coins.