A prominent crypto analyst has cautioned investors about a potential decline in Dogecoin (DOGE), even if Bitcoin (BTC) hits new record highs. This warning comes amid significant statements shared on social media.
What Triggers Dogecoin Decline?
According to the analyst, there are two scenarios where DOGE could suffer a setback. First, if Bitcoin experiences a rejection and loses momentum, DOGE may follow suit. Second, if Bitcoin sees a massive surge, drawing collective attention and liquidity from other altcoins, including DOGE, the meme coin could see a sharp drop in value.
The analyst highlighted that in historical patterns, while some projects might withstand liquidity shifts better, others like DOGE could be more adversely affected. The focus on Bitcoin could lead to a significant outflow from DOGE as investors chase BTC’s rally.
Can DOGE Overcome Resistance?
Market analyst Ali Martinez has been closely monitoring Dogecoin’s price dynamics. He points out that DOGE faces a critical resistance zone between $0.166 and $0.171. However, should DOGE bulls manage to break past this level, the meme coin has the potential to double in value, eyeing the next resistance around $0.322.
Martinez’s analysis suggests that overcoming the resistance could lead to a significant price increase, but warns investors of the challenges posed by the current market sentiment.
Key Insights for Investors
Investors should consider the following insights:
- A strong BTC rally could lead to liquidity outflow from DOGE.
- Breaking the $0.171 resistance could potentially double DOGE’s value.
- Current market dynamics and BTC’s performance are crucial in predicting DOGE’s trajectory.
Current DOGE Price
At the time of writing, Dogecoin was trading at $0.1649, following a 1.32% decline over the past 24 hours. The meme coin has seen a 1.28% drop over the past week. Dogecoin’s market capitalization has decreased to $23.7 billion, placing it 8th in the Coinmarketcap rankings.
Despite the price decline, DOGE’s 24-hour trading volume has surged by 12%, reaching $1.5 billion. This uptick in trading volume has fueled speculation about potential short-selling activities among traders.