Reasons for possible Dogecoin (DOGE) growth – what are they?
Dogecoin was one of the sensations of 2021 – the dramatic rise of the altcoin gave it enormous popularity and led to dozens of coins inspired by the famous meme. However, after its significant growth, DOGE has not shown any clear profitability results. However, the coin may still get a “second wind”. According to experts, there are three favourable reasons for this. We tell you about them in details.
Today Dogecoin is in eleventh place in the ranking of cryptocurrencies by market capitalization, that is, the product of the price by the number of coins in circulation. The coin is valued at 13 cents, which is 81.5 percent behind the historical high price, with the record being set quite a long time ago on May 8, 2021.
Dogecoin exchange rate chart for the last year
Such results cannot be called positive, as many investors – and especially beginners – have lost a lot of money on such movements of the cryptocurrency. Be that as it may, experts have still found arguments in favor of a possible improvement in the DOGE situation. There are three in total.
Ilon Musk’s purchase of Twitter
According to Cointelegraph’s sources, earlier this week Twitter representatives announced that they had accepted an offer from billionaire Ilon Musk to buy its social media platform for $44 billion. It was Ilon who caused the hype around Dogecoin last year, as he started constantly posting tweets about the coin on his page.
The acquisition of Twitter could change the course of the site in a big way, given Musk’s eccentricity and his desire for innovation. There’s also a place for his “love of Dogecoin” here – it’s possible that the altcoin could be integrated into Twitter in the future, at the billionaire’s behest. On the news of the acquisition, the price of DOGE showed a small bounce.
Dogecoin on news of Twitter acquisition by Ilon Musk
Investors should also not rely too much on rumours – there are no firm guarantees yet that Musk will actually integrate DOGE into Twitter. That’s the view held by Noel Acheson, head of marketing at Genesis Global Trading. Here’s his rejoinder.
But this possibility – however remote – is enough to get traders excited about the potential profits of adopting DOGE.
Dogecoin is gaining popularity again
Musk’s announcement of Twitter’s acquisition on April 25 and its subsequent positive impact on Dogecoin’s price, which rose nearly 20 percent on the same day, coincided with a surge of interest from individual and institutional investors. According to Google Trends, the number of searches with the phrase “buy Dogecoin” rose 392 per cent in a 24-hour period. Meanwhile, the volume of transactions on the DOGE blockchain worth more than $100,000 reached the $2.59 billion mark on the same day.
Volume of large transactions on the DOGE network
Amidst all the aforementioned developments, the altcoin even caught the attention of famous crypto-enthusiast Roger Vera, who was one of Bitcoin’s active supporters in the past. He later changed his position completely, promoting a fork called Bitcoin Cash. In a recent interview, Wehr stated that Dogecoin is many times better than Bitcoin.
Dogecoin is much better than Bitcoin. It is cheaper and more reliable.
We should note that we can't agree with this statement at least because the hash rate of the Bitcoin network managed to set a new record this week. At the same time, the Dogecoin network is secured by the Scrypt algorithm, which is the same as the Litecoin algorithm. In other words, the popularity of DOGE mining is not so high, so calling it more secure against Bitcoin is not quite fair.
Bitcoin network hash rate chart for the past week
What’s happening on the Dogecoin chart
In general, since May 2021, a so-called “falling wedge” or “falling wedge” structure has been forming on the altcoin chart. It is traditionally considered bullish and precedes sharp price spikes. During the formation of this pattern, the price of the asset “squeezes” between two inclined lines, forming a wedge. This is accompanied by a gradual decline in trading volumes to a minimum, as can be seen on the DOGE chart.
The “falling wedge” on the Dogecoin chart
The moment the upper wedge line is broken through, which coincides with a surge in altcoin trades, is considered to be the beginning of a precipitous uptrend. In theory, the price growth reaches the target at the height line of the wedge itself, that is, at the current value of DOGE around $0.14, the coin can grow by at least 190 percent to $0.40.
There is a more pessimistic scenario, in which the rise could be as little as 50 per cent from the $0.075 point. In that case, Dogecoin would rise to $0.21.
It's important to note that the analysis only helps to suggest what might happen to the cryptocurrency's value. And because its details are used by many traders and investors, it periodically causes them to perform a certain sell or buy type action at the same time, so that the prediction on the chart actually comes true.
However, it should be understood that there can be no guarantees in case of such assumptions. This is just one version of what could happen.
Elon Musk and Dogecoin
We think the situation with Dogecoin is ambiguous. In fact, much of the hope for DOGE's growth is solely due to Ilon Musk's activism. While his actions may indeed make the coin more popular, it did not save the cryptocurrency from a significant collapse last spring. That said, DOGE still hasn't recovered from that time's slump. So, hoping for miracles and a possible repeat of the miracle of early 2021 should be at least cautious.
Have you bought DOGE yet? Join other altcoin fans in our Millionaire Crypto Chat. We’ll discuss other interesting things there as well.
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