As the recent sell-off in the cryptocurrency market began to slow, Dogecoin, the largest memecoin by market capitalization, was hit the hardest.
$DOGE fell 25% last week amid Bitcoin and Ethereum, memecoins often experience larger liquidations during downturns.
"When they [Bitcoin and Ethereum] drop, there are buyers entering the market because they believe prices will recover as the market rebounds," he said. "In memecoins and small-cap cryptocurrencies, there are no value buyers. When the market declines, no one is waiting to step in at lower prices for Doge."
Hougan believes the recent decline is due to the latest Federal Reserve meeting, where the central bank decided to cut interest rates for the third time this year but also indicated that there would be fewer rate cuts than expected in 2025, signaling tighter economic conditions. This prompted investors to sell risky assets, including cryptocurrencies and specifically memecoins.
Despite the recent decline, the cryptocurrency market has had a great year, driven by renewed interest from investors after President-elect Donald Trump won a second term and promised to support a favorable regulatory environment for the industry, including the creation of a strategic Bitcoin reserve.
Dogecoin has risen over 230% this year, partly due to tech billionaire Elon Musk taking on a new role as one of Trump’s closest allies. Trump has appointed Musk to head a new department aimed at reducing government spending called the Government Efficiency Department, or DOGE—a clear recognition of Musk's favorite cryptocurrency—maintaining Dogecoin's relevance.
Hougan stated, "As we look toward 2025, the overall backdrop for cryptocurrency is so positive that I expect a bull market for Bitcoin, Ethereum, and possibly popular memecoins like Doge."
