- Dogecoin (DOGE) has been consolidating for the past two months, but with the altcoin gaining positive momentum, investors foresee a breakout.
- DOGE has been facing stiff competition, recently being dethroned by Avalanche (AVAX) from the top ten cryptocurrencies by market cap.
Dogecoin (DOGE) has in the past 2 months failed to break out of its consolidation phase. Data shows that DOGE began its upward movement on February 12th but has failed to break out from its pattern.
In February, DOGE gained some positive momentum, this was partly influenced by renewed interest from the world’s richest person, Elon Musk. Elon Musk sparked Dogecoin buzz by liking an old tweet about using it for tuition payments, fueling speculation. Musk’s X platform aims to introduce peer-to-peer payments soon, potentially opening doors for cryptocurrencies, including Dogecoin.
At the time of writing, DOGE has surged by nearly 7% and is trading at $0.08585. The recent gains have seen the world’s most popular memecoin add more than 10% in the past 7 days. In recent weeks, the memecoin has lost its prestigious position among the top ten cryptocurrencies to Avalanche (AVAX). AVAX now ranked tenth has a market cap of a little over $15 billion while DOGE has a market cap of a little over $12 billion.
Although DOGE has begun showing signs of a breakout, renowned analyst Ali Martinez raising concerns about a potential mega crash as investors begin to lose faith in this popular cryptocurrency.
According to Martinez, there has been a notable decline in transaction volume and a decrease in whale transaction count, indicating a downturn in overall trading activity. “This could be a sign that fewer people are buying, selling, or transferring DOGE, possibly due to reduced interest or confidence in it,” Martinez noted.
#Dogecoin is experiencing a decrease in transaction volume and whale transaction count, which typically indicates lower trading activity. This could be a sign that fewer people are buying, selling, or transferring #DOGE, possibly due to reduced interest or confidence in it! pic.twitter.com/SiKNxx4FhN
— Ali (@ali_charts) February 12, 2024
Furthermore, Dogecoin has been facing stiff competition from up-and-coming memecoins. Leading the charge is Shiba Inu, the second most popular memecoin on the market. Shiba Inu has in the past year impressed by both price performance and network activity owing to the dedication of the development team. Another emerging rival is Solana’s BONK.
Why DOGE Investors Remain Optimistic of ATH
Although DOGE’s performance has disappointed in the past couple of months, several reasons could trigger a market rally that sets up the memecoin for an all-time high. In addition to continued endorsement from Elon Musk and the X platform, real-world adoption is set to skyrocket as DOGE plans to hit Shopify as a payment option this year. Furthermore, Dogecoin intends to venture into online payments with the expansion of Gigawallet.
Amid the headwinds, Dogecoin’s future could rely on its ability to transition from a meme coin to a project with utility, and its tech roadmap holds the key.
Dogecoin currently faces a major hurdle at $0.088, marked by both horizontal resistance and the long-term channel’s resistance trend line. Overcoming this hurdle would signal a potential trend reversal, with analysts predicting a 25% jump to $0.102, the next resistance level.
