Dogecoin provides opportunity for investors to ride potential 40% rally
- DOGE has maintained price patterns similar to those of BTC, ETH, and SOL despite its meme status.
- The popularity of other newer meme coins may be drawing attention away from DOGE.
- DOGE on-chain metrics and technical indicators suggest a rally may be on the horizon.
Dogecoin (DOGE) is down nearly 3% on Tuesday, as a recent analysis shows that its price is following similar patterns to top cryptocurrencies like Bitcoin, Ethereum, and Solana. While the move has seen DOGE show lesser volatility compared to previous cycles, the meme coin could be set to resume its sharp movements with a potential 41% rally.
DOGE’s price sees lower volatility than in previous cycles
In the past few months, DOGE's price performance has followed similar patterns to those of BTC, ETH and SOL, which have far larger market caps and relevant use cases.
Considering DOGE's meme coin status, it is expected to demonstrate higher volatility than these assets, but that has yet to be the case in the current cycle. Unlike the 2020/2021 cycle, when DOGE saw significant price spikes, it has maintained significantly lower volatility.
DOGE/BTC/ETH/SOL Price comparison
One major reason may be the popularity of recent large-cap meme coins like PEPE, WIF, BONK, BRETT, etc. Investors may now be approaching DOGE as the "BTC" of meme coins, which they hold onto for the long haul rather than short-term speculative purposes like in previous years.
This is evidenced in DOGE's larger market cap, which would be less affected by retail speculative traders.
Is now a good time to get in on DOGE?
On the flip side, the emergence of these other meme coins may have caused DOGE to receive less attention from investors.
The Santiment Weighted Sentiment indicator helps capture a balanced overview of an asset's social volume combined with investors' sentiments. The indicator spikes when there's increased social volume around an asset, and the messages are largely positive. It dips when the volume is still high, but the sentiment is negative. If the social volume is high but the sentiment is mixed, it stays around 0. If the volume is low, it also stays around 0.
DOGE's weighted sentiment has remained largely under 0 in the past three months and is currently at -0.247, indicating less or a slightly negative interest from investors.
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DOGE Key On-chain data
This could also be a potential buy opportunity, as prices often rebound when the weighted sentiment figure goes below zero.
Additionally, despite its recent rise, DOGE's 30-day Market value to Realized Value (MVRV) ratio is still at low levels. As a result, DOGE could be set for a rally in the coming days.
DOGE just ascended into a key price range and may attempt to complete the upside of the range. Such a move will see DOGE rise 41% to $0.175.
DOGE/USDT 1-day chart
On the downside, DOGE could find support around $0.110, where investors purchased 22.15 billion DOGE tokens.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Author
Michael Ebiekutan
FXStreet
With a deep passion for web3 technology, he's collaborated with industry-leading brands like Mara, ITAK, and FXStreet in delivering groundbreaking reports on web3's transformative potential across diverse sectors. In addi
