Can DogeCoin Maintain its Momentum as it Nears $0.12?
Since Bitcoin entered a bearish phase in September, Dogecoin’s trajectory has been on a downward trend, struggling to breach the $0.12 mark. Currently, DOGE is trading at $0.103.
However, there seems to be a glimmer of hope as Dogecoin starts a bullish trend in the second week of this volatile month, marking an impressive 8% surge from the previous day’s closing price.
With Bitcoin long positions gaining traction, there are indications of a potential altcoin season on the horizon, with Dogecoin possibly leading the pack. An intriguing prospect worth exploring.
Altcoin Market Trends Point Towards a Shift
An altcoin season is typically characterized by 75% of the top 50 cryptocurrencies outperforming Bitcoin over a 90-day period.
Recent data reveals that in the last three months, only 15% of 61 altcoins have outpaced Bitcoin. However, in the past month alone, this number has surged to 72%.
Meme tokens, in particular, have shown strength this year, with 42 tokens surpassing Bitcoin’s performance, fueling initial speculations of an emerging trend in the altcoin market.
Given Dogecoin’s recent uptrend over the past 72 hours, could it be the catalyst for a broader market breakout?
While some analysts express optimism about this scenario, a cautious tone is warranted when examining the market dynamics.
Diverging from the mid-May rally that drove Dogecoin towards $0.17, driven by significant trading volumes across spot and perpetual markets, the current volume levels paint a different picture.
The subdued trading activity indicates a sense of apprehension among traders, amid the recent dip in Bitcoin’s price to around $51,000.
Is Dogecoin simply mirroring Bitcoin’s movements, hinting at a potential price reversal?
Analyzing Dogecoin’s Recent Performance
Despite witnessing three consecutive days of price gains on Dogecoin’s daily chart, the peak in positive net flow on September 9th may signify substantial inflows, possibly linked to day trading strategies emphasizing aggressive profit-taking.
Memecoins, including Dogecoin, are notorious for their high volatility compared to traditional altcoins. Hence, viewing the current uptrend as a sentiment-driven push mirroring Bitcoin’s trajectory wouldn’t be an overstatement.
Yet, the lack of convincing buying pressure raises doubts about the sustainability of this trend.
In essence, market bulls are riding on Bitcoin’s resurgence above $57,000. While the trend appears short-lived, as projected by some analysts, it might prompt Dogecoin to retreat below the critical support level of $0.10.
As a result, Dogecoin’s prospects of leading the impending altcoin season might face hurdles in the near term.