Dogecoin leads gains as crypto market shows muted recovery

Cryptocurrency prices showed signs of recovery across the board on Wednesday after almost a week of declines.

Dogecoin led growth among cryptos with large market values, rising for a second day. Prices of the meme coin had jumped Tuesday after Tesla CEO Elon Musk tweeted that the electric-car maker would start accepting it as payment for Tesla merchandise. Dogecoin immediately surged 33% to more than $0.21 before retreating to as low as $0.17. It is trading at $0.18 at press time, CoinGecko data show.

The dogecoin bump led to a resurgence of sorts in the broader crypto market. Bitcoin added nearly $2,000 this morning compared with Tuesday’s lows. It continues to battle the $50,000 price resistance, one the asset was rejected from on Monday.

Ether recovered after yesterday’s dump to $3,680, adding 3% on the day to $3,880 at press time.

Crypto funds were behind some of the big ether bids in the past few weeks. Wallet activity of Singapore-based Three Arrows Capital showed the fund moved thousands of ether from crypto exchanges Coinbase and Binance in the past day, having snapped up $400 million worth of the asset earlier this month.

That move came despite Three Arrows founder Su Zhu criticizing Ethereum for its slow and expensive network. Zhu later told CoinDesk the fund remained bullish on ether as the macro environment became calmer and global stock markets appeared “healthy.”

Other top gainers on crypto charts were tokens of Avalanche with 15% gains at press time. Solana tokens added 7% and terra (LUNA) 5%, CoinGecko data show.

Elsewhere, polygon (MATIC) rallied 8.9% on news of a new deflationary mechanism. The proposal rolled out a testnet version of a ‘burn’ implementation on Tuesday to introduce eliminating a set amount of MATIC on each transaction. A testnet is an experimental environment for software under development.

Tests estimated nearly 0.27% of MATIC’s 6.8 billion circulating supply would be burned annually if the implementation is passed.

Troubles remain

Meanwhile, some say the market could take more time before seeing a noticeable recovery.

Laurent Kassis, a crypto exchange-traded fund (ETF) expert and director of CEC Capital, said he doesn’t anticipate an imminent move upwards, based on liquidations and trading volumes.

“The U.S. has woken up and bought on anticipated lower bitcoin prices, which has pushed the price up slightly but it is still under pressure,” Kassis told CoinDesk.

Crypto prices remain suppressed compared with last week. Prices of bitcoin, ether, and Binance Coin, the three largest cryptocurrencies by market capitalization, are down 4.2%, 9.9%, and 8.3% in the past week. And investors have lost even more on Solana, LUNA, and MATIC: The three tokens are down 12%, 14.8%, and 15.4% respectively on the week.