Is the 'silent' support level of Dogecoin deteriorating?
1. Declining market enthusiasm
• Overall sluggish cryptocurrency market: After experiencing a boom in 2021, the cryptocurrency market has entered an adjustment phase. Investor interest in high-risk assets has decreased, and market enthusiasm has weakened.
• The craze for altcoins has faded: Dogecoin, as a 'meme coin', largely relies on social media and celebrity effects, such as the support from Elon Musk. However, the market is currently more focused on projects with strong practicality, like DeFi and Layer 2 technologies on Ethereum.
2. Lack of practical application scenarios
• The core positioning of Dogecoin is as a 'fun coin', mainly used for small payments and community culture. However, compared to other blockchain projects, Dogecoin lacks innovative technology or practical business applications.
• Although some merchants accept Dogecoin payments, its usage for payments remains limited, making it difficult to compete with mainstream payment tools.
3. Increased competition
• Diversion in the meme coin market: With the rise of other meme coins like Shiba Inu (SHIB), Dogecoin's market share has been diluted, affecting its long-term performance.
• Technological lag: Compared to blockchains like Ethereum and Solana, Dogecoin's technology has not seen significant upgrades, and its network functionality and ecosystem development appear to be lagging.
4. Macroeconomic environment
• Increased global economic uncertainty (such as high inflation and rising interest rates) makes investors more inclined towards safe-haven assets rather than speculative cryptocurrencies.
• The tightening of the Federal Reserve's monetary policy has weakened market liquidity, directly impacting risk assets including Dogecoin.
