Over the weekend, Dogecoin experienced a significant price drop, continuing its correction phase after a robust four-week surge. The meme-based cryptocurrency fell to $0.3431 from a high of $0.4265, marking a decline of 19.55%. This shift has led to discussions on social media regarding the durability of its recent gains and whether the driving momentum is diminishing.
The decrease in Dogecoin’s price can largely be linked to diminishing interest from market players. Key indicators of social media sentiment, which has played a crucial role in influencing Dogecoin’s price and appeal, are showing signs of a downturn. Nevertheless, a crypto analyst believes there is still potential for Dogecoin to rise, especially regarding its social engagement metrics.
Dogecoin’s Interest May Still Have Room to Grow
Even though Dogecoin is a large cryptocurrency, its price fluctuations are primarily driven by trader sentiment rather than genuine demand for its functionality or the associated company. This dependence on sentiment leads to a cyclical behavior: heightened interest leads to price spikes, which are often followed by necessary corrections as enthusiasm dwindles.
The latest surge in Dogecoin’s value was fueled by broad interest surrounding the US presidential election, along with figures like Donald Trump, Elon Musk, and humorous connections to the Department of Government Efficiency (D.O.G.E.). Social media significantly contributed to this momentum, with mentions of Dogecoin climbing across various platforms. However, the current price adjustment suggests that the initial excitement may be wearing off.
Crypto analyst Ali Martinez noted on social media that Dogecoin’s popularity has not yet peaked. He shared a chart displaying Dogecoin’s social media interest over time, indicating that while recent spikes are noticeable, they have not yet matched the highs seen in 2021. This context suggests that there is still potential for price increases as the cycle progresses.
Future Predictions for Dogecoin’s Price
Notably, the recent rally and correction have resulted in a bull flag pattern forming on the 1-hour candlestick chart. This pattern typically indicates a continuation of the current price trend, suggesting that Dogecoin may break out upward and continue its rally. For this to hold true, Dogecoin needs to close above $0.40, which would confirm the bull flag breakout. Martinez has set a price target of $0.85 in this scenario.
Currently, Dogecoin is priced at $0.3691, marking a 7.6% increase since it dipped to $0.343. Should social interest revert to levels akin to those in 2021, it could trigger another rally in Dogecoin’s price.
