Dogecoin (DOGE) may have taken a tumble after surging over 30% earlier this week, but according to analytics platform Santiment, there is still plenty of upside potential for the popular meme cryptocurrency.
The surge in Dogecoin’s price occurred shortly after Elon Musk changed his new prized social platform’s Twitter logo to a Dogecoin logo. The move generated polarizing opinions on Crypto Twitter, with some speculating that it was a marketing strategy aimed at getting laughs, attention, or money. Regardless of Musk’s intentions, Dogecoin’s price went up by more than a third in a short period of time, decoupling from the rest of the cryptocurrency market.
Santiment’s analysis of the situation reveals that there were several signs of a top forming as major players began taking profits. Three metrics, including active addresses and circulation, trading volume and transaction volume, and whale transactions ($100k+) all spiked together during Dogecoin’s surge, indicating that a local top was forming. This observation is not unique to Dogecoin, as it holds true for any asset, no matter how meme-ified.
Additionally, the 30-day MVRV, which measures average trading returns, is sitting at +11%, a relatively safe zone. Altcoins typically become dangerous when they hit +20% or more. Therefore, even after Elon’s DOGE logo replacement on Twitter, there may still be some cushion for prices to rise further, says Santiment.
The analysis noted that the whale accumulation indicates that some individuals, likely those close to Musk, knew about the planned DOGE pump before it occurred. When the price spike happened, the red line, which represents the whales, dumped, indicating that profits were being taken.
DOGE was worth $0.08 and has increased by 0.6% at the time this article was being written.