Meme Coin’s price action is a bit unusual, and here’s why
- Dogeoin’s Surprising Growth
- The breakthrough of the ether
The long-awaited recovery of the cryptocurrency market is finally here, although it is purely speculative and most likely short-term. Some positivity could be a sign of a potentially stronger recovery in the future.
Dogeoin’s Surprising Growth
Rumors are powerful fuel, especially for the cryptocurrency market and related projects. Thanks to rumours, DOGE was able to earn triple-digit returns for its early investors. In this case, rumors and assumptions about Twitter’s implementation of Dogecoin flew back into the minds of retail investors, and the result is another surge in the price of the largest memecoin on the market.
Typically, DOGE’s market cycles consisted of an explosive and short-term pump, a quick 10-20% reversal, and a gradual fall to pre-pump levels. However, the meme coin deviated from the above market growth scheme and the recent price action in the market has proved this point.
Over the past eight days, DOGE gained 40% of its value but lost more than 50% of its value from the local peak reached in early November. Such behavior in the market is highly unusual, which is why any prediction becomes extremely complicated.
A bullish cross is expected between the 50-day and 200-day moving averages in the coming days. The signal could become a catalyst for accelerating the rally. However, DOGE’s main problem is a high percentage of speculative traders who rely on the above rumors and false news.
The breakthrough of the ether
In addition to Bitcoin’s surge to $17,000, Ethereum did not lag behind digital gold and made an attempt to approach the $1,300 price level. Unfortunately, the initial momentum wasn’t enough to reach the key price level and Ether has bounced back to $1,250.
However, the break above the 21-day moving average is the first sign of an imminent trend reversal that ETH badly needs. Due to the lack of network activity, Ether’s price has been falling for almost a month now.
Recently & Today covered how Ethereum’s burning mechanism delivers barely burned volume. Although Ether became a deflationary asset in early November, Ether’s net issuance returned to surplus after the network’s transaction activity hit a multi-month low.
Given the lack of network usage, Ethereum will most likely remain inflationary despite the consensus mechanism change and a significant drop in issuance. However, historical data suggests that the low activity on the network is temporary and the deflation mechanism is starting to work again even without the help of throughput-intensive applications.
At press time, Ethereum is trading at the $1,267 price level and attempting to reach the key psychological resistance level at $1,300. The successful break would allow a run to the 50-day moving average, which is the first barrier before a recovery run.