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Dogecoin fell to tenth place on CoinMarketCap, which was splashed by USDC today. While the market cap gap between the two is relatively surmountable at $213.4 million at the time of writing, the event still represents a constant bleeding of meaning for the controversial meme coin. Despite attempts to revive interest in Dogecoin, the $1 price target, heavily supported by strong backers, is looking further and further away. With that in mind, is it time to acknowledge that DOGE’s day has come? Two expert crypto analysts answer with fundamental and technical analysis…

Dogecoin tries to regain its former glory

When it comes to capturing the hearts and minds of investors, not crypto investors, nothing comes close to Dogecoin. So much so that it spawned countless imitators, all hoping to gain only a fraction of its influence. In many ways, he has greatly improved the crypto case by showing that investing can only be “for memes.”

At the same time, this “sell point” is its downfall, as some argue that it is absurd that a meme token with no obvious use-cases can generate the market value it has. One such person is financial consultant Ric Edelman, who padolsed on the grounds that DOGE’s popularity hinders a market that strives for credibility and legitimacy:

It wasn’t serious. There is no legal use case. It’s not something I consider to be of any use to the crypto community in their efforts to build credibility and legitimacy in the financial market or get approved by the SEC.

Dogecoin team getting ready

The team behind Dogecoin is making moves to develop and regain investor interest. First, there was the formalization of the governance structure at the Dogecoin Foundation, and this also included involving Ethereum co-founder Vitalik Buterin as an advisor. However, there is talk of further integration with Ethereum. Including a possible shift from Proof-of-Work to a more environmentally sustainable Proof-of-Stake model, as Ethereum did with ETH 2.0. Alongside this is an attempt to repackage DOGE as a payment token, led by Mark Cuban. But based on its drop in the CoinMarketCap rankings, investors seem unconvinced.

DOGE technical analysis

Dogecoin peaked in early May, reaching its ATH level of $0.74, which is 13%. It represented an incredible YTD gain of 000. Its market cap of $95 billion at the time made it more valuable than many real-world companies serving millions of people. It was difficult to reconcile this with the fact that the only use case was “for memes”. While we’ve seen some sort of rebound in the past few weeks, $0.35 proved to be a tough resistance level to overcome. The 30% drop on September 7 has led to narrow-scope movement since then. Strong support can be found at $0.17 and by all accounts, a possible retest of this level in the coming days represents a do-or-die dilemma for DOGE.

Meanwhile, based on the rise of Solana, Avalanche, and Terra, it seems that investors are now favoring serious projects. As the Dogecoin Foundation tries its hand at improving its credibility, asking investors to take Dogecoin (DOGE) seriously is perhaps a step too far at this point.

Will DOGE bark soon?

At the time of writing, it was noted that nearly 60% of wallets containing DOGE are missing. IntoTheBlock’s Global In/Out of the Money indicator offered the same thing. On any given day, the increased ROI manages to attract new investors to the market. However, the current yield situation does not act as an incentive. Also, Messari’s data highlighted a rather interesting trend in terms of the meme coin’s network-to-value-t0-transaction ratio. This ratio measures the relationship between market capitalization and transfer volumes. When NVT is high, it indicates that the network value exceeds the value being transmitted over the network.

Usually such a trend tends to be positively lost in the long-term valuation of any lower value. The same was observed with Ethereum. But that was not the case with DOGE. The price of altcoins always gets pumped when NVT is low. On August 15, DOGE’s price was at the local top of $0.3, while the adjusted NVT fell as low as 33.96. Also, during the SNL saga where the price was at its ATH, NVT was as low as 16.47.

Santiment data says for Dogecoin

As can be seen from the attached chart, the current level (333) is extremely high and not suitable to continue the rally of DOGE according to tradition. Also, when the price of the coin rose slightly in August, the development activity was starting to show signs of revival. In fact, this metric witnessed a steep slope from 8 to 13 in 10 days. Since then, the same situation has remained rather stagnant. Having said that, it should also be noted that the number of active developers has also been on the decline lately. There was only 1 developer actively working at the time of writing. In fact, posts on the GitHub repository have also been pretty stagnant lately.

Finally, collective sentiment was additionally declining at the time of writing. Therefore, according to analyst Lavina Daryanani, it does not make sense to expect the price of DOGE to rise in the coming days. If DOGE manages to maintain its current levels, this in itself will equate to a victory for the meme coin and its loyal community. In retrospect, the 0.5 dollar benchmark, just like the $1, seems far from attainable at this point.


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Michael Lewis

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