The cryptocurrency market has been experiencing serious volatility lately. After the decline in Bitcoin, investors began to look for safer havens. This situation negatively affects the popularity of meme coins, which moved the markets for a while. Short-term bets, especially focusing on Dogecoin (DOGE), raise questions about the future of the sector. In addition, there is a short selling pressure in XRP and Cardano after the rise. Here are the details…
Santiment: Bullish signal for XRP, Cardano and these cryptos
According to the findings of the analytical firm Santiment, there is an intense short-term selling pressure after the rise in important altcoins such as XRP and Cardano. This can actually be considered a positive signal for the bulls. Because short positions that are liquidated can act as “rocket fuel” that will push prices up. However, things are going a little differently on the Dogecoin front.
According to Santiment’s analysis, the lower the market cap/realized value ratio (MVRV) over the last 30 days, the more likely it is to see a short-term bounce. While this rate gives a slightly bullish signal with values such as -4% for Bitcoin, -4.3% for Ethereum, -3.5% for XRP, it gives a very strong bullish signal for Dogecoin with -16.7%. So, although DOGE technically has the potential to jump, the movements in the market point in a different direction. It is worth noting that cryptos such as Tocoin and Ethereum are also on Santiment’s list.
What’s next for DOGE?
Coinalyze data reveals that DOGE’s funding rates have turned negative since Tuesday, reaching -0.0027% on Thursday, marking a decline not seen since October 2023. Funding rates are periodic payments made by investors based on the price difference between forward and spot markets. Although these rates are not very high, when evaluated together with their constant downward trend and the decline in DOGE prices, it is possible to say that there is a downward trend in the market. DOGE lost 12% of its value last week, erasing all the gains it had made since March.
In the Meme coin sector, the value of tokens lost up to 40% in a week as investors turned to less risky assets. Neil Roarty, analyst at investment platform Stocklytics, said in a statement: “When the Bitcoin price drops, meme coins often not only follow this decline, but also lose a larger portion of their value. In this case, the dream of a meme coin summer season may have to be postponed.” said.
DOGE futures had one of their worst days
On the other hand, DOGE futures had their worst day since May 2021. The liquidation of a $60 million long position during this period was recorded as an unusual situation compared to Bitcoin futures. These declines coincide with Bitcoin losing value in recent weeks due to massive investor sell-offs of $2 billion, net outflows from U.S.-listed exchange-traded funds (ETFs) and a strengthening dollar.
As a result, the cryptocurrency market has entered a period full of uncertainties. With the impact of the decline in Bitcoin, investors are turning to safer havens. This situation negatively affects the popularity of meme coins, which moved the markets for a while. Intensifying short-term bets on Dogecoin raise questions about the future of the industry. It is necessary to closely follow how the market will shape itself in the coming days and how Dogecoin will break this downward trend.
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