Is the Dogecoin Spike a Harbinger of Bad News for Bitcoin?
Over the past couple of weeks, Dogecoin’s (DOGE) market cap has grown from $7.93 billion to $13.2 billion, a 66.5% increment. The project’s trading volume has also surged from $216 million to $844 million, a 290% jump. Moreover, DOGE’s price has rallied by 22.6% over the last seven days. The sudden interest is attributed to Elon Musk’s announcement of a payment feature for Twitter. Being the DOGE proponent that he is, many expect the feature to include the original memecoin as an option.
However, a spike in Dogecoin (DOGE) might not be a sign of good things to come. According to crypto analysis firm Santiment, a spike in DOGE has historically been followed by a wider market selloff. As per the chart shared by the firm on Twitter, DOGE rises have been followed by Bitcoin (BTC) price retraces. The firm stated that Dogecoin pumps are a reflection of crowd euphoria.
Will BTC fall following Dogecoin’s pump?
History does tend to repeat itself. However, this time around, things could take a different turn. The current DOGE rally is riding on Musk’s Twitter 2.0 announcement. If the payment feature is implemented and DOGE is accepted as payment on Twitter, it could lead to more interest in the general crypto space. However, how Bitcoin (BTC) reacts to the development is yet to be seen.
However, if history does repeat itself, it is only a matter of time before we witness another BTC fall.
A survey found that more than 60% of DOGE’s investors maintained a profit as a result of the token’s success. It is safe to assume that a sizeable part of Dogecoin’s holders are betting on the cryptocurrency’s long-term potential given that 69% of holders have been holding onto the token for more than a year.
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