Dogecoin is currently showing signs of slowing down – at least for now – after a week of strong growth.
While other long-standing “dog meme” coins are declining, a new dog-themed token is breaking out and dominating the market this week.
According to data from CoinGecko, Dogecoin, the seventh-largest coin by market cap, is currently trading at $0.373 each. This is a decrease of 2.9% in the past 24 hours and down 5.1% compared to Wednesday of last week.
Although this is just a minor correction for a highly volatile coin, it also marks a significant change from what has happened in the past week.
Just over a week ago, Dogecoin reached a three-year high of $0.43 and returned to $0.40 on Tuesday as Bitcoin hit an all-time high. However, last week was somewhat quieter compared to what had occurred before.
Meme coins like Shiba Inu (SHIB), Bonk (BONK), and Dogwifhat (WIF) are also declining, while only BONK among these has recorded an increase in the past week.
A newcomer in the group of dog-themed meme coins is attracting attention, despite the overall market decline. Just a Chill Guy (CHILLGUY), a meme coin on the Solana platform inspired by a viral TikTok video about a dog dressed in casual attire, has grown 400% in the past 24 hours, reaching $0.41 with a market cap of $408 million. This token was just launched earlier this week.
Why has DOGE decreased in value?
Why has Dogecoin lost its strong momentum from last week? DOGE and other meme coins are very volatile, so a price decline after a strong surge is common.
The momentum of Dogecoin is often driven by attention and frenzy from external events. As attention on Donald Trump's election victory and speculation about Elon Musk's Department of Government Efficiency (D.O.G.E.) fades, the positive impact on Dogecoin's value may also diminish.
However, Jake Ostrovskis, an OTC trader at Wintermute, believes that the current state of Dogecoin is not just a problem for this meme coin but also reflects the general trend of many altcoins today.
“We are witnessing a relative weakening of altcoins in general,” he shared. “Bitcoin's dominance is pulling liquidity from altcoins,” he further explained. “These markets are already very volatile, so corrections are a natural part of the trading process.”
Additionally, Youwei Yang, Chief Economist at BIT Mining, pointed out potential changes in Dogecoin mining activities, including mining combined with Litecoin (LTC). He believes miners may be dumping DOGE as prices reach high levels.
“Mining LTC/DOGE is currently yielding very large profits, two to three times that of Bitcoin, depending on the generation of the ASIC machines,” Yang said. “Miners are selling large amounts of DOGE that they have accumulated previously to take profits.”
He recommends miners to take profit while DOGE is still high: “We have learned from history and are concerned that this level of profit will not last,” Yang said. “Sell a portion to protect profits, or at least to pay the electricity bill.”
Despite the price decline, Dogecoin still achieved impressive gains over the past month, with data from CoinGecko showing that this coin has increased by more than 163% over the last 30 days.
A key figure in the revival of Dogecoin is Elon Musk, CEO of Tesla and SpaceX, who began to ‘ignite’ Dogecoin back in 2019 on Twitter – the platform he currently owns and has renamed to ‘X.’ His relentless posts have created a fervent community, and the market for Dogecoin has exploded accordingly. The market cap of Dogecoin has now surpassed $55 billion and continues to grow since Musk became a strong supporter of President-elect Donald Trump this year.
Changpeng Zhao, former CEO of Binance, also remarked that Dogecoin has developed as it is now thanks to Elon Musk.