With an increasing number of memecoins entering the market, Dogecoin's strong community could keep the cryptocurrency from fading into oblivion, but analysts are skeptical about traders' hopes of being able to reaching a price of $1 this cycle.
A price of $1 would represent a 36% increase from Dogecoin's May 2021 all-time high of $0.73 and a 525% increase from today's price of $0.16.
DOGE 4-hour price chart | Source: Tradingview
Over the last week, DOGE posted a 2.92% gain – significantly lower than other large-cap memecoins over the same time frame, according to CoinMarketCap data.
The next three largest memecoins by market capitalization have all seen notable bullish price action over the past seven days, with PEPE up 49%, Shiba Inu up 19%, and Dogwifhat (WIF) up 20%.
“DOGE is one of the most cyclical altcoins in the space,” anonymous trader Rekt Capital said, adding that the growing popularity of other memecoins will not have a major impact on sentiment of investors for the largest memecoin.
“The launch of other memecoins does not mean DOGE will be affected.”
Pav Hundal, chief analyst at Australian exchange Swyftx took a more skeptical view, saying that although DOGE has a “huge user community,” any sharp price increase could lead to Significant sell-off from long-term holders.
“A lot will depend on the decision-making of the millions of small investors who bought DOGE in 2021 and are now suffering paper losses,” Hundal said, suggesting it was uncertain whether the price would reach $1 la before the risk of a sell-off appears or not.
“It was a joke. If most of these people decide to take profits quickly during the cycle, you could start to see selling pressure increase.”
Hundal added that Dogecoin does not “see the deep order books of the previous cycle.” In the derivatives market alone, open interest (OI) has decreased by 56% since the beginning of April.
OI measures the total value of all outstanding DOGE futures contracts on exchanges. The figure has dropped from $2.15 billion on April 1 to its current level of $928.72 million, according to CoinGlass data.
Despite the decline in memecoin derivatives activity, Rekt Capital argues that “the cyclicality in DOGE's chart” suggests that Dogecoin will “most likely” reach a price of $1 during this cycle.
He reiterated that Dogecoin has a “historical legacy” and a largely predictable cycle, which traders frequently point out on social media.
Anonymous trader Blockchain Mane said in an April 24 post that observing past data typically sees DOGE price increasing in May.
Source: Blockchain Mane
Rekt also looked at social media posts from billionaire Elon Musk as a price catalyst, claiming Musk remains “very interested in Dogecoin.”
Since April 17, Musk interacts regularly with famous KOL DOGE DogeDesigner on X.
In April 2023, Musk asked a US judge to dismiss a $258 billion lawsuit against him by investors accusing him of running a pyramid scheme to promote Dogecoin. Despite this, Musk recently hinted his interest in cryptocurrencies has waned somewhat.
“I don't spend much time thinking about cryptocurrencies. Almost nothing,” Musk told Ark Invest CEO Cathie Wood in December 2023.
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