Dogecoin (DOGE), the popular meme coin, experienced a brief but dramatic surge in price on Wednesday, rising by 25% within a single trading session. The rally, which came amid a wider cryptocurrency market surge following Donald Trump’s 2024 US election victory, allowed Dogecoin to surpass Ripple’s XRP in market capitalization for a brief period. However, the rally proved to be short-lived as selling pressure quickly followed, pushing DOGE back below XRP and erasing the bulk of its gains.
On Wednesday, DOGE surged to a monthly high of $0.211, an impressive 25% jump in just a few hours of trading. This surge was enough to push Dogecoin ahead of Ripple (XRP), securing the seventh spot in market capitalization. For a brief moment, it seemed as though the meme coin might establish a stronger foothold in the top ranks of the crypto market.
However, as the initial excitement began to cool, traders began taking profits, leading to a quick reversal of fortunes for Dogecoin. As of the latest market data, DOGE is trading at $0.192, reflecting a 9% loss over the past 24 hours. The market quickly absorbed the gains, and XRP regained its position, relegating Dogecoin back to its previous market cap standing.
On-chain data further supports the idea that profit-taking and selling pressure are fueling Dogecoin’s recent decline. According to IntotheBlock’s data, Dogecoin’s exchange netflow — a metric that tracks the difference between the amount of DOGE deposited into exchanges and withdrawn — has spiked to 852.46 million DOGE over the last 24 hours.
A positive exchange netflow generally signals that more of the asset is being deposited into exchanges than is being withdrawn. This indicates that more investors may be seeking to sell, potentially causing downward pressure on the price as the supply of DOGE on exchanges increases. Given the recent uptick in netflows, the market sentiment appears to be shifting towards a bearish outlook for DOGE in the short term.
Further weighing on Dogecoin’s price is the overall market sentiment, which is currently negative. DOGE’s weighted sentiment — a measure of the mood in social media and market discussions — is currently at -0.16, indicating that more social media chatter around Dogecoin is driven by negative emotions. A weighted sentiment below zero often correlates with bearish expectations, signaling that investors may anticipate a price decline in the near future.
As of writing, Dogecoin is trading just below the $0.193 level that it attempted to establish as a support floor during its recent rally. Without strong buying pressure, the coin’s price may face further downside risks. If DOGE fails to hold above its current price level, the next support level to watch is $0.172. A further breakdown below this level would signal that the current uptrend is over and that Dogecoin is likely to continue its downward trajectory.
If $0.172 fails to hold, the next major support zone is $0.154, which could be the next target for sellers. The negative sentiment surrounding Dogecoin combined with increasing exchange netflows suggests that the meme coin could be facing a prolonged period of bearish price action, at least in the short term.
After a dramatic surge earlier this week, Dogecoin has been caught in a wave of selling pressure, with traders cashing in on profits and pushing the meme coin back below Ripple’s XRP in market cap. The increasing exchange netflows and negative market sentiment point to a potential further decline for DOGE, especially if support levels around $0.193 fail to hold.
With buying pressure waning and market sentiment turning negative, Dogecoin’s short-term outlook looks increasingly bearish. If the meme coin continues to see a lack of buying interest, its price may face continued downside, potentially testing lower levels at $0.172 or even $0.154 in the coming days.
November 2024, Cryptoniteuae