There is growing anticipation surrounding Dogecoin [DOGE] as it approaches its Q4 high of $0.48 set last year. The emergence of a DOGE ETF has generated significant excitement and, coupled with its increasing presence in U.S. political circles, the coin is poised for a remarkable surge, currently standing just 16% below its post-election peak. Could this be the moment that HODLers have been waiting for?
Remaining Cautious
Amid the buzz surrounding Dogecoin and its increasing visibility, the possibility of a 16% surge doesn’t seem out of reach. The impending DOGE ETF and the rising interest in it suggest a transition towards becoming a more recognized asset class.
It is evident that traders are taking notice of these developments, with Open Interest (OI) witnessing a 7% increase, surpassing $5 billion, while the neutral RSI hints at further potential growth. The recent spike in Dogecoin’s value can be attributed to wallets holding 10 million to 1 billion DOGE tokens acquiring an additional 590 million coins within 24 hours, indicating a resurgence of FOMO sentiment within the market.
However, it’s worth noting that the wallets responsible for this surge have also been divesting billions of coins, reducing their holdings from 50 billion to under 47 billion over a week.
Following this activity, Dogecoin experienced a notable 10% surge, breaking through the critical $0.40 barrier, previously breached during the Trump rally in mid-November. Despite this initial upward trajectory, the coin retraced swiftly, falling back to $0.35 within three days.
As excitement persists, large investors buying during dips, and general market resilience, one might wonder if Dogecoin is gearing up for another 16% leap or if this is merely a fleeting moment of hype.
Assessing the Viability of Dogecoin Investment
HODLers are eagerly awaiting a decisive breakout by Dogecoin, rewarding their patience since it last peaked at $0.48 six weeks ago. However, the journey is far from smooth, with the recent 10% surge in DOGE coinciding with the launch of the TRUMP memecoin, injecting fresh investments into the market.
Following this surge, both major and minor traders quickly cashed out, reflecting a sense of uncertainty about Dogecoin’s long-term value and turning it into a riskier prospect. With the focus shifting to new memecoins, Dogecoin witnessed a significant decline in liquidity, marked by $5 billion in sell-offs.
Despite the ongoing enthusiasm, a projected 16% spike in Dogecoin’s value still seems distant unless a significant market shift occurs. The recent 6% uptick could be viewed as a temporary fluctuation, especially as $8.91 million in long positions face potential squeeze. Exercise caution and rely on solid information rather than market noise to navigate this period of volatility.