December 6, 2022

Dogecoin Spikes 1,120%, Avoids Correction as On-Chain Volume Skyrockets

3 min read

Dogecoin stole the crypto spotlight following an impressive bull rally to new all-time highs. Although some trading platforms are trying to tame its volatility, DOGE could be primed for additional gains.

Dogecoin Catches up With GameStop

Retail traders led by Reddit’s r/wallstreetbets community took Wall Street by surprise after effectively cornering hedge funds out of their GameStop shorts. As GME’s market price increased by a whopping 2,500% because the start of the year, bears were required to close their positions, incurring over $5 billion in losses.

Regulators quickly stepped in to prevent additional liquidations by encouraging trading platforms to ban trades of GME completely and enforce strict constraints.

Offered the decentralized nature of the cryptocurrency market, FTX listed the viral stock for trading.

However, the liquidity shock that GME had actually suffered was significant sufficient to set off a 78% correction that squashed late-comers.

GameStop US dollar price chart
GME on TradingView While market individuals turned their attention towards GameStop, Dogecoin went into a bull rally that was reportedly triggered by a r/wallstreetbets copycat subreddit called SatoshiStreetBets. It’s likely that a tweet from a major WSB-themed Twitter account added to the price spike. The concept behind the pump was for DOGE to imitate GME’s cost action and offer an opportunity for cryptocurrency enthusiasts to

benefit enormously. The substantial spike in purchasing pressure permitted this altcoin to surge by more than 1,120% within 24 hours. As Dogecoin reached a brand-new all-time high of $0.089, the Tom Demark (TD) Sequential indication flashed a sell signal on the per hour chart that was later on verified by a 60% downswing.

Dogecoin US dollar price chart
DOGE/USD on TradingView Now that

Robinhood has limited users from trading DOGE and other cryptocurrencies, investors wonder whether its “price is bound for further losses. On-Chain Volume Continues Rising Dogecoin appears neutral from a technical viewpoint. The parabolic stop and reverse, or & ldquo; SAR, & rdquo; moved above this altcoin’s rate within the 1-hour chart. Such market habits suggests that the uptrend reached fatigue and a new corrective duration could kick-off.

Nonetheless, the SuperTrend indication remains on the favorable side. As it sits around the $0.036 support level, it recommends there is more room to increase. Only a spike in downward pressure that pushes DOGE below this price difficulty will develop the conditions for a steeper correction.

If this were to occur, Dogecoin might dive towards the next considerable interest location at $0.020.

Dogecoin US dollar price chart
DOGE/USD on TradingView It deserves noting that on-chain volume continues rising steadily regardless of the recent cost depression.

While Dogecoin’s market price dropped to the$ 0.036 assistance level and briefly recovered, on-chain volume continued rising to exceed$37.60 billion. This sort of bullish divergence in between rate and on-chain volume suggests DOGE is primed to advance even more.

Dogecoin On-Chain Volume by Santiment
Dogecoin On-Chain Volume by Santiment If Dogecoin handles to slice through the $0.071 resistance barrier, it will likely retest the current peak of $0.089. Moving past this obstacle could activate FOMO amongst market individuals, pushing rates towards $0.14 or greater.

Disclosure: At the time of composing, this author held Bitcoin and Ethereum.