Dogecoin rises 8%, altcoin season speculation grows
The Essentials at a Glance
- Dogecoin (DOGE) saw an 8% increase in just three days.
- The price is approaching the $0.12 mark but remains below this resistance level.
- Bitcoin’s (BTC) market movements heavily influence DOGE.
- Some analysts are speculating about a potential altcoin season, but uncertainties remain.
Dogecoin: A Strong Surge, but How Sustainable?
Dogecoin (DOGE) has seen a remarkable 8% increase over the past few days, approaching the crucial $0.12 mark. This surge followed a period of bearish movements triggered by Bitcoin’s (BTC) recent market correction. At the time of writing, the DOGE price stands at $0.103, indicating some stabilization. However, the question remains: Is this rise just a short-term recovery or the start of a larger trend?
Altcoin Season on the Horizon?
An altcoin season is often declared when 75% of the top 50 altcoins outperform Bitcoin over the past 90 days. Current data shows that only 15% of altcoins have outperformed Bitcoin in the last three months. Interestingly, this figure rose to 72% in the past 30 days. Meme coins, including Dogecoin, have performed particularly well this year, fueling speculation about an upcoming altcoin season.
Lower Trading Volume: A Warning Sign?
Despite Dogecoin’s recent rise, there are signs that caution is warranted. Compared to previous rallies, especially the one in May, trading volume is significantly lower this time. This could indicate some hesitation among traders, particularly in light of Bitcoin’s recent correction, which pushed its price down to around $51,000. The lower volume might suggest that the market is not yet ready to push DOGE to new highs.
Volatility and Short-Term Gains
Meme coins like Dogecoin are known for their high volatility. Despite the recent surge, there are signs that some traders are realizing short-term gains. Data from IntoTheBlock shows that DOGE’s net inflow peaked on September 9, which could indicate aggressive profit-taking. This suggests that the current upward trend may be more short-term in nature and not necessarily indicative of a sustained recovery.
Bitcoin as a Driver for Dogecoin
Like many other altcoins, Dogecoin often follows the movements of Bitcoin. DOGE’s recent rise may be closely tied to Bitcoin’s resurgence, as it climbed back above the $57,000 mark after a decline. However, if Bitcoin experiences another correction, it could also pull Dogecoin down with it.
Our Assessment
While Dogecoin has seen a solid increase in recent days, several factors suggest caution. The low trading volume and short-term profit-taking may indicate that the current upward trend is not sustainable. Additionally, Dogecoin remains heavily dependent on Bitcoin’s movements. While a sustained altcoin season is possible, there are no clear signs yet that Dogecoin will lead it. Traders should closely monitor developments and watch for further signals before making major decisions.
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