After a week of significant gains, the upward momentum of Dogecoin is slowing down—at least for now.
While the prices of other long-standing dog-themed coins have declined, a new dog-themed token has taken the place of DOGE, rapidly climbing the rankings this week.
CoinGecko data shows that the seventh largest cryptocurrency currently trades at $0.38 each. This is a 0.5% drop in the last 24 hours and a 2.5% drop since last Wednesday.
Certainly, for a particularly volatile currency, this is just a mild decline, but it is also a significant shift compared to last week's trend.
Just over a week ago, Dogecoin hit a three-year high of $0.43 and bounced back to the $0.40 mark on Tuesday, driven by Bitcoin reaching a new all-time high again, but last week's market seemed relatively calm compared to before.
Shiba Inu (SHIB), Bonk (BONK), and Dogwifhat (WIF) also saw declines on the day, with only BONK remaining up over the past seven days.
However, Floki (FLOKI) has shown weakness, rising about 15% since Coinbase announced its listing on Wednesday.
Despite the market downturn, a newcomer in the meme dog space is still making waves. Just a Chill Guy (CHILLGUY) is a Solana-based meme token inspired by a viral TikTok featuring a personified dog in casual clothing. Over the past day, the token surged 400% to $0.41, with a market cap of $408 million. The token was just launched this Monday.
Why did DOGE drop?
Why has the momentum of Dogecoin slowed since last week? The volatility of Dogecoin and other meme coins is very high, so pullbacks after rebounds are common.
The momentum of Dogecoin is often driven by attention and hype. As rumors of Donald Trump's election victory and speculation about Elon Musk's proposed Department of Efficiency (DOGE) fade, the positive impact on its price may diminish.
However, Wintermute OTC trader Jake Ostrovskis stated that Dogecoin's predicament is not unique to this leading meme coin, as many altcoins are currently in the same situation.
He told Decrypt: "We see a relatively weak altcoin space." "The strong performance of Bitcoin is drawing liquidity away from 'altcoins,'" he said. "These markets are inherently unstable, so pullbacks are part of normal trading."
Meanwhile, BIT Mining Chief Economist Yang Youwei pointed out that changes in Dogecoin mining could occur—including ‘merged mining’ with Litecoin (LTC)—indicating miners may sell their holdings when prices are high.
"LTC/DOGE mining profits are very substantial, with profits two to three times that of Bitcoin, according to the algebra of ASICs," Yang said. "Miners are selling large amounts of DOGE they have accumulated in the past and recently to take some profits."
He advised miners to cash out while Dogecoin is rising: "We have learned from history that we should be worried this level of profit won’t last," Yang told Decrypt. "Sell some to secure profits, or at least pay the electricity bill."
Even with the decline, Dogecoin has still achieved tremendous growth over the past month, with data from CoinGecko showing it skyrocketed more than 163% in 30 days.
The revival of Dogecoin is thanks to one person: Tesla and SpaceX CEO Elon Musk, who has been heavily promoting Dogecoin on Twitter since 2019. He now owns the platform and has renamed it 'X'.
His continuous antics have garnered Bitcoin a dedicated following, causing its market cap to soar. Bitcoin's market cap now exceeds $55 billion, having risen since he became a staunch supporter of elected President Donald Trump this year.
