- DOGE has barely kept pace with Bitcoin over the past four months
- The continuation of the consolidation phase is expected
Dogecoin [DOGE] has performed decently well since October 2023. The bulls have made gains of 45% since 19th October. Yet, this is only half the gains Bitcoin [BTC] has made during the same time.
It is oft said that lagging during a market-wide rally is a sign of weakness from the buyers. Yet, an analyst gave Dogecoin bulls some hope with a chart posted on X (formerly Twitter).
Source: Ali on X (formerly Twitter)
Examining the case for a Dogecoin breakout and consolidation
Ali’s post suggested that Dogecoin was in a consolidation phase. The rally in 2021 was preceded by a similar pattern playing out. AMBCrypto dived further into the weekly chart on TradingView to understand when and how far DOGE could rally.
Source: DOGE/USDT on TradingView
The previous rally was preceded by a range formation that lasted 576 days, or a year and seven months. The rally that followed measured 18376% from the range highs. At the time of writing, DOGE has moved within a range for 483 days.
That is almost a year and four months. This means that we have at least three more months of a range formation before DOGE could break out. Yet, compared to 2020, there are many other meme coins whose popularity is comparable to Dogecoin.
Hence, the capital that previously flowed into DOGE would now be diluted among a basket of meme coins such as Shiba Inu [SHIB], Bonk [BONK], and Pepe [PEPE]. This idea was corroborated by Santiment metrics, but more on that later.
Another interesting, and slightly absurd aspect of the price chart presented above is that the 261.8% Fibonacci extension level (pale yellow) was reached.
It must be noted that the scale was logarithmic. Using a similar set of Fib levels for the recent triangle formation, DOGE was projected to rally to the $59 mark in the next cycle.
For context, a price of $7.012 per DOGE would equal the meme coin’s market capitalization with Bitcoin’s. A $59 price tag would mean DOGE’s market cap would be close to $8.5 trillion, which is almost thrice Microsoft’s current market cap.
Examining the trends between 2020 and 2024
Source: Santiment
The active addresses count peaked in May 2021 and had been in a downtrend till November 2023. This trend shifted quickly and the 30-day active addresses were at an all-time high based on data available on Santiment.
The weighted sentiment (30-day simple moving average) also picked up firmly over the past three months, but it was nowhere close to the 2021 highs.
The total amount of holders has steadily trended higher, which meant that the meme coin was not yet obsolete despite the numerous new tokens in the market. But the most interesting finding was the social dominance.
In August 2021, although DOGE prices had begun to retreat, the social dominance peaked and reached 11.11%. Since then it has steadily declined and stood at 1.15% at press time. This supported the idea that capital flows into the Dogecoin market might be diluted.
How much are 1, 10, or 100 DOGE worth today?
However, it should also be remembered that the crypto market cap has been steadily rising, and the next cycle could garner far greater capital inflows than the 2020 cycle.
The jury is out on whether DOGE could replicate its earlier gains, but one thing was clear- you just can’t rule out a memecoin pump of face-melting, retirement-funding proportions.
