Dogecoin, a cryptocurrency that started as a joke but gained popularity, is currently facing a downturn in the crypto market, largely driven by Bitcoin’s decline. Crypto analyst Kriss Pax recently discussed the current state of Dogecoin in a YouTube video, highlighting the influence of Bitcoin on the overall market. Dogecoin’s price has dropped to around 11.4 cents, unable to maintain the 12-cent mark.
One of the key factors contributing to Bitcoin’s decline is the impending repayment of 140,000 Bitcoins from the Mt. Gox exchange hack, scheduled for July. This event has instilled fear among investors, anticipating a massive sell-off once the repayments are made. Additionally, Bitcoin mining profitability issues and miners’ sell-off to cover energy costs have worsened the situation.
Despite the market-wide decline, Dogecoin holders are showing resilience, with many holding onto their positions. However, there have been significant liquidations of leveraged positions, with $4 million in long leverage positions recently liquidated. Pax remains optimistic about Dogecoin’s future, suggesting that the current downturn might present a buying opportunity, with signals like the Relative Strength Index (RSI) indicating a potential rebound.
Looking at the broader market dynamics, Pax discusses altcoin dominance, which tends to rise when Bitcoin dominance falls. Historical patterns from 2020 suggest that an altcoin bull run could be on the horizon, with Ethereum likely leading the next market rally, followed by altcoins like Dogecoin. Pax also highlights an on-chain buy signal for Dogecoin, suggesting it is currently undervalued and presents a strong buying opportunity at its current price levels.
Drawing on historical data and patterns, Pax remains bullish on Dogecoin’s long-term prospects. He references previous market cycles from 2016 and 2020, which saw significant rallies following similar signals. While predicting exact future prices is challenging, Pax believes that Dogecoin could experience substantial gains if the market dynamics play out as expected. The potential for a rebound in Dogecoin’s price is supported by various indicators and historical trends in the crypto market.
