There is uncertainty about whether Dogecoin can break its previous high. Here are some analyses of factors that support or hinder its potential to break the previous high.
Favorable Factors
• Celebrity Effect: Elon Musk has long supported Dogecoin; he has mentioned Dogecoin multiple times on social media and even stated that it is his favorite cryptocurrency. He has considered integrating it into Twitter's (now X) payment system. If Musk actually promotes the use of Dogecoin on X, it would greatly enhance its visibility and utility, potentially leading to a price increase.
• Market Trend: With the overall warming of the cryptocurrency market, mainstream cryptocurrencies like Bitcoin are seeing price increases, and Dogecoin is also expected to rise. Additionally, Dogecoin has shown strong upward momentum in 2024, with prices soaring over 75% in October, and analysts believe it is in the early stages of a new bull market in November.
• Technical Analysis: Dogecoin broke out of a large symmetrical triangle pattern that has been active since April 2021 in October 2024. Such a technical breakout is usually seen as a bullish signal, and analysts using technical rules predict its price potential target in the coming years is $2, with the possibility of reaching $1 at some point in 2025.
• Community Support: Dogecoin has a large community backing, with members actively participating in the promotion and trading of Dogecoin. This strong community power can provide some support for Dogecoin's price and may potentially drive its price up.
Adverse Factors
• Unlimited Supply: Unlike cryptocurrencies like Bitcoin that have a supply cap, Dogecoin's supply increases by about 5 billion coins each year. This means it faces significant inflation pressure, which may suppress its price increase.
• Market Sentiment: Recently, Dogecoin's trading volume has significantly decreased, and market sentiment has gradually turned pessimistic, with the weighted sentiment index showing its sentiment score has dropped to -0.57. If this negative sentiment spreads further, it may lead to a large sell-off by investors, resulting in a price drop.
• Competitive Pressure: The cryptocurrency market is highly competitive, with new projects and coins emerging constantly. Dogecoin faces competitive pressure from other cryptocurrencies. If other cryptocurrencies perform better, they may attract investors' funds away from Dogecoin, thus impacting its price increase.
