After gaining the spotlight thanks to a 980% pump on January 28, Dogecoin (DOGE) briefly came into the top 10 of the rankings by market capitalization for the first time since 2015. As the massive pump lost momentum and traders quickly took profits, it seemed investors would move beyond meme-based cryptocurrency and find something else to invest in.
The pump started initially on exchanges prevented retailers from buying more GameStop and AMC stock on January 28. Fueled by the Reddit discussion group r / Wallstreetbets, the army of investors turned their attention to silver and a selection of ‘cheap’ cryptocurrencies.
On January 28, Twitter user “WSB Chairman” asked, “Did Doge ever make a dollar?” to his 750,000 followers. That was enough activate the monster rally, despite Dogecoin having no protocol upgrades or developments since 2015.
The 68% retracement that followed the $ 0.087 spike was similar to Bitcoin’s (BTC) sharp decline after the December 2017 crash, except this time, instead of 50 days, it lasted only 24 hours.
Multiple social media influencers and streamers expressed their displeasure with buying the top, an indication that the temporary speculative frenzy was over. After hovering around $ 0.03 for most of January 30 and January 31, DOGE managed to produce an additional 80% pump in less than three hours.
It is almost impossible to find the exact trigger for those events as there are multiple social networks including private Telegram groups and trading signal apps.
Reddit’s r / SatoshiStreetBets currently has 213,000 active users, and after the DOGE outbreak, a memepost from user Woke_AF_Populist quickly climbed to the most upvited list.
There seems to be endless support from the Dogecoin fan base, including Tesla’s CEO and founder Elon Musk. The lack of a concrete use case for the meme coin certainly begs the question of whether r / WallStreetBets members will jump from traditional markets and embrace the generally unregulated ethos of the cryptocurrency sector.
Regardless of the outcome, measuring social activity will now be a norm instead of an alternative indicator.
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