Dogecoin (DOGE) has been facing significant turbulence, with investor sentiment leaning bearish despite being one of the most popular meme coins on the market. While some short-term traders remain optimistic, the overall market volatility continues to be a major concern. For those with a long-term investment outlook, holding onto DOGE has been a test of patience, as the coin has been consolidating for 28 days. Amid this slump, attention has once again turned to Elon Musk, the tech billionaire known for his influential role in past Dogecoin rallies.
Musk’s past endorsements and cryptic tweets have been powerful catalysts for DOGE’s price movements. Recently, he hinted at the possibility of Tesla reintroducing Dogecoin as a payment method, potentially expanding its use beyond just merchandise purchases to more substantial transactions. Given Musk’s history of boosting Dogecoin’s value through his endorsements, the big question now is whether his latest moves can help reverse the current downtrend and rekindle investor interest in DOGE.
Dogecoin's Q3 Performance Hits a 5-Year Low
Dogecoin’s performance this year has been rocky. After a promising start with a 125% surge in Q1 2024, the coin lost 42% of those gains in Q2. The third quarter has been particularly tough, with DOGE down by nearly 24%. According to CryptoRank, this has been Dogecoin’s worst Q3 performance in the last five years, with the last comparable slump occurring in 2019 when DOGE dropped by 28.9%. As of the latest data, Dogecoin is down 1.6% in the last 24 hours, trading at $0.097.
Market sentiment has also shifted negatively, with Dogecoin seeing the fourth-largest drop in strength according to DYOR’s crypto narrative analysis. Despite this poor performance, Dogecoin remains the leading meme coin by market capitalization, boasting a market cap of $14.1 billion—significantly ahead of its closest competitor, Shiba Inu.
An analysis of the meme coin sector on CoinGecko shows that dog-themed coins dominate the top 10, with six out of ten spots occupied by such coins, further emphasizing Dogecoin’s position as the 'top dog' despite recent struggles.
Will Elon Musk Help DOGE Recover in September?
Dogecoin is currently teetering on the lower boundary of a consolidation zone, a precarious position given the ongoing volatility in Bitcoin prices. According to Coinglass, 30-day trading data indicates that traders are predominantly bearish on Dogecoin, with $58 million worth of short positions opened between $0.0985 and $0.1135. However, the question remains: could these short positions be at risk of liquidation?
Some traders, particularly scalpers operating on 15-minute charts, are aggressively entering long positions, indicating short-term optimism for Dogecoin’s price. On a 4-hour time frame, a pattern of closing shorts followed by opening longs suggests a potential shift in sentiment. If this pattern extends to the daily timeframe, it could signal a short-to-medium term price increase of around 17%, though this would likely be a gradual rise due to the prevailing sell pressure in the broader crypto market.
As September unfolds, the market outlook for Dogecoin remains uncertain. While the month has started on a negative note, there are hints that Dogecoin may experience further volatility. Whether Elon Musk’s influence can help DOGE break free from its current slump remains to be seen, but the market will undoubtedly be watching closely.
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