An Analyst Says Dogecoin Could Rally Further Following An Elon Musk-Induced Rally — But There’s a Catch By Benzinga

Benzinga – Dogecoin (CRYPTO: DOGE) skyrocketed 32% last week, thanks to a boost from Twitter CEO Elon Musk, who had changed the social media platform’s icon of a bird to the DOGE meme.

And according to Santiment, the cryptocurrency possesses even more upside potential following last week’s surge.

In a blog post, Santiment’s marketing director Brian Quinlivan said that DOGE’s market-value-to-realized-value over the past 30 days is below the “danger zone,” suggesting that the price of the meme coin could still go up.

“As for average trading returns, we can see that the 30-day MVRV is at +11%. Typically, when altcoins hit +20% or more, this is a ‘danger zone.’ However, considering it didn’t quite get that high, even with the massive Elon-induced price surge, there could still be some extra cushion for prices to rise further,” Quinlivan said.

However, Quinlivan also warned that Dogecoin’s price action should still not inspire confidence after last week’s surge.

Also Read: Dogecoin Leaps On Elon Musk’s Reported Twitter Payments Plan: Why DOGE Supporters Are Excited

“It’s hard to get too excited that we’re suddenly seeing a bit [of a] correlation break, with ‘lower highs’ consistently being made even in the hours past yesterday’s pump. ‘Higher highs’ would be a much more solid indication that a bigger rally will be commencing soon,” he said.

Quinlivan further cautioned that the meme coin could be hitting a local top, citing a spike in three metrics: DOGE’s active addresses and circulation, trading and transaction volumes, and whale transactions.

“When these three metrics all spike together during a time when the asset is going on a decoupled surge independent from the rest of the markets, it’s a pretty solid bet that a local top is nearly always forming here, and profit taking yourself is a wise decision,” he added.

Within 30 minutes of the Musk-induced DOGE rally, a pseudonymous crypto trader, “Tree of Alpha,” managed to make over $1 million.

At the time of writing, Dogecoin was trading at $0.08314, up by 8% over the last seven days.

Read Next: Elon Musk Does It Again! Endorses Dogecoin, Says He’ll Keep Buying The Meme Coin

Photo: Shutterstock

© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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