Bitcoin and Dogecoin have some interesting characteristics that highlight their similarities, including their price action. First, both are pioneers in their respective segments, with BTC being the first cryptocurrency and DOGE being the first memecoin.
Both Dogecoin and Bitcoin have also demonstrated similarities in price action. The correlation observed in recent months is primarily due to DOGE mimicking BTC's price movements.
The prices of these two assets do not necessarily need to move together consistently, but most peaks and troughs are similar.
For example, Bitcoin reached a new ATH this month, but DOGE has yet to retest the 2021 highs.
However, DOGE traders investing in memecoins based on Bitcoin's price fluctuations have achieved significant success.
Institutions and whale activity are common denominators for Bitcoin and Dogecoin prices.
Institutions have led Bitcoin price action through ETFs since they were approved earlier this year. Meanwhile, Dogecoin whales have also mirrored the inflow and outflow of ETF funds.
Speaking of whale activity, recent reports reveal that they have purchased over a quarter billion DOGE tokens in the latest downturn.
It is no surprise that Bitcoin has also experienced a recent surge in accumulation as prices fell below $95,000.
The surge that pushed the price back above $99,000 at the time of writing is marked by strong whale activity.
According to data from IntoTheBlock, the inflow of large holders surged from 1,490 BTC on December 19 to 15,260 BTC the following day. A spike in large holder inflows was observed during the same period.
The outflow remains low at 12,820 BTC as of December 20, confirming greater buying pressure than selling pressure.
However, ETF data remained negative on Thursday and Friday for the first time since early December.
But what will happen next with Bitcoin and Dogecoin as 2025 approaches? Some analysts believe that the recent sharp pullback is a classic sign that we are heading for more volatility in the future.
A major drop could occur as BTC continues to rise to new highs. However, this is not necessarily the result of the 2025 bull run.
A recent analysis from Glassnode highlights that the bullish market of 2024 has so far experienced limited declines.
Factors impacting the pullback and bullish sentiment
This is unlike previous bull markets when cryptocurrencies experienced major downturns.
According to analysis, the increasing interest from institutions and strong demand for Bitcoin ETFs are reasons the pullback is not too severe.
This is because these factors not only contribute to strong demand but also create a more optimistic sentiment.
What does all this mean for Dogecoin? Fewer pullbacks and strong demand in 2025 could make the market more excited.
If the correlation between DOGE and BTC remains, it means that Dogecoin may have an upcoming bullish period.
Strong bullish demand for DOGE means it could have a great opportunity to rise above $1.
However, it is also possible that memecoins will decouple from this correlation at some point in the future.
But what would that look like? DOGE could achieve strong growth and push up to new historical highs. On the other hand, a separation could diminish its appeal to large holders (whales).
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