Bitcoin’s recent drop below $61k has opened up an opportunity for traders to snatch up memecoins at discounted prices. This has paved the way for astute investors to take advantage of possible short-term profits.
Despite many major memecoins showing signs of reaching a bottom, Dogecoin finds itself lagging behind. It actually posted the smallest 7-day increase among the top 20 memecoins.
Nevertheless, despite this weak performance, analysts are speculating that DOGE could be gearing up for a significant rally, aiming to regain the spotlight from its newer rivals.
DOGE Must Seize Opportunities Amid its Competitors’ Gains
DOGE kicked off October with a bearish retreat, marking a daily drop of over 3%. This wiped out a considerable portion of its previous gains. It encountered resistance at $0.13210, coinciding with a bearish MACD crossover on the daily chart.
At the time of writing, DOGE was trading at $0.10792, showing a marginal 0.10% increase from the day before. Yet, it has a significant distance to cover to bring back investors who are currently facing losses.
However, this situation might be concealing a notable bullish signal, as CryptoCrypto points out.
Traditionally, a memecoin’s value depends more on community sentiment than the attractiveness of Bitcoin. If BTC stabilizes, establishing $61k as a market peak, it could trigger a notable inflow of capital into these memecoins. This would empower traders to maximize their short-term profits.
In addition, a notable 400k addresses hold 46 billion DOGE with an average buying price of $0.1228, currently in the red.
If the meme craze maintains its momentum, these investors could still see future profits, with FOMO potentially driving long-term gains. Nevertheless, DOGE must leverage the upswings of its competitors to ignite its own rally, showcasing the changing dynamics in the memecoin landscape.
In essence, DOGE, the biggest memecoin by market capitalization, is feeling the heat from its growing competitors, endangering its supremacy in the market.
Factors Contributing to Dogecoin’s Increased Volatility
A memecoin is usually considered “bottomed out” when its price hits a low point, allowing investors to accumulate before a potential turnaround. Historically, this has been crucial for DOGE’s rebound, as evident in early August when its price dipped below $0.10 due to a market slump.
However, a subsequent purchase of 50 million tokens boosted DOGE’s price, keeping it on an upward trajectory for most of the month.
Since then, net flows have mostly been negative – a sign of a possible accumulation period.
Despite aggressive buying activities by spot traders, their impact on DOGE’s price has been lackluster. This might suggest third-party intervention.
To put it succinctly, strategic moves by whales have amplified DOGE’s volatility compared to resilient peers like SPX6900, which surged by over 120% just this week.
Therefore, DOGE’s future now relies heavily on other memecoins. If the excitement mounts, DOGE could confirm $0.170 as a support level, ushering in a potential upswing. Otherwise, it risks getting stuck in a consolidation phase – a more plausible scenario.