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DOGE is out of stagnation, looking for a new all-time high

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A fundamental tenet of the Dow Theory suggests that the patterns of asset prices tend to echo through time, much like Mark Twain’s renowned saying: “History doesn’t repeat itself, but it often rhymes.” This concept prompts traders to scrutinize current market movements for any semblance to past events as a way to forecast future trends.

Dogecoin, the leading meme-based digital currency, has recently surged past its critical 50, 100, and 200-week simple moving averages, marking the end of a lengthy 20-month period of stagnation at the lower echelons of a bear market. The ascension of the 50-week SMA above the 100-week SMA is indicative of a positive shift in momentum.

These occurrences bear a remarkable resemblance to the events of late 2020, highlighted by a fractal pattern where DOGE embarked on a significant rally in the initial months of 2021.

DOGE price now and in the past

During a 20-month period languishing in a bear market’s grip, with its value oscillating between 5 and 15 cents, Dogecoin finally made a breakout from this range towards the end of the previous month. A parallel 20-month phase of bear market consolidation throughout the latter half of 2019 and into 2020 laid the groundwork for a massive surge in early 2021, culminating in a 3,600% increase to 37 cents by May 2021. At the time of writing, DOGE is priced at $0.18 on Gate.io.

Thus, drawing from the 2019-2020 fractal as a reference, the path for DOGE appears to be inclined towards the upside. Examining the charts more closely reveals that DOGE’s upward trajectories are pronounced but tend to be short-lived, rarely extending beyond six months, whereas the subsequent downturn and the phase of bottoming out/consolidation usually span close to three years.

Another parallel with the 2020 scenario is the widespread anticipation that major central banks, including the Federal Reserve, are poised to reduce interest rates in the upcoming months. This prospect of further liquidity easing is promising for assets situated further along the risk spectrum. In 2020, central banks globally maintained rates at near-zero levels.

However, it’s crucial to acknowledge that historical data does not necessarily guarantee future outcomes, particularly with speculative cryptocurrencies like DOGE and other meme tokens. A possible bearish reversal in bitcoin, the bellwether of the cryptocurrency market, could have a domino effect, potentially pulling DOGE down with it.

DOGE and the following

Dogecoin, originally created as a joke based on the popular “Doge” internet meme featuring a Shiba Inu dog, has transcended its meme coin status to become a significant player in the cryptocurrency market. Its rise to prominence has been notably influenced by Elon Musk, the tech mogul known for his ventures with Tesla and SpaceX. Musk’s frequent and whimsical endorsements of Dogecoin on social media platforms have played a pivotal role in driving its popularity and value.

Whether through tweets or mentions in interviews, Musk’s association with Dogecoin has not only attracted a vast number of retail investors but also spotlighted the coin in the mainstream financial discourse, underscoring the unique and symbiotic relationship between a cryptocurrency and a high-profile tech entrepreneur. This connection has introduced a dynamic where Dogecoin’s market movements can often be swayed by Musk’s public sentiments, adding an intriguing layer to its investment narrative.

Other meme tokens you should know about

In the bustling landscape of meme cryptocurrencies, Dogecoin faces competition from a range of contenders, each vying for attention in the digital currency space. Among these, PepeCoin, inspired by the Pepe the Frog internet meme, has carved out its niche, appealing to a community drawn to its unique brand of internet humor and culture. Unlike DOGE, the supply for PEPE is much larger, and hence the token might seem to cost way less at first glance. According to the latest numbers, PEPE price floats around $0.000008.

More recently, the Solana blockchain has introduced new competitors that have quickly gained traction: Bonk and WIF. Bonk, in particular, surged in popularity due to its distribution strategy and community-driven approach, positioning itself as a token for the people by airdropping a significant portion of its supply to Solana NFT holders and developers.

WIF, another entrant in the Solana ecosystem, seeks to capture the imagination and investment of those interested in the meme coin space, offering new mechanics and incentives. These new contenders reflect the evolving landscape of meme coins, where community support, novelty, and the ability to capture the zeitgeist of the internet culture play critical roles in determining success.

 

Image by KNFind from Pixabay

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