Dogecoin (DOGE -5.24%) is certainly driving plenty of investor intrigue this weekend, with one of the biggest moves among the top-10 cryptocurrencies in the market. The dog-inspired meme token surged more than 16% from Friday at 4 p.m. ET to Saturday morning’s peak, before giving up the vast majority of these gains on Sunday. Investors appear to be taking some profits after an incredible surge that saw Dogecoin break through the $0.48 level this weekend.
Now, it’s worth noting that at this weekend’s high, which represented a multi-year high for the meme token, Dogecoin was roughly 50% away from breaking a new all-time high. And given this token’s impressive momentum, and the moves seen across the crypto sector in recent weeks with other notable mega-cap projects breaking through key psychological levels and making new all-time highs, there are plenty of reasons why investors continue to grow more bullish on Dogecoin breaking through the previous high of a little more than $0.73 per token.
Let’s dive into what’s driving this move, and where Dogecoin could be headed from here.
Meme tokens are popping and dropping
The investing landscape for most cryptocurrencies is one that any investor would identify as being volatile. For Dogecoin, a project that’s been the beneficiary of some rather strong politically infused tailwinds, this ride is one that’s been mostly upside-at least since the reelection of Donald Trump to the presidency.
As a very friendly figure to the crypto movement, Donald Trump has previously espoused a number of policies that would be beneficial for the crypto sector as a whole, and particularly projects that are U.S.-based. And with Elon Musk now heading up the so-called “Department of Government Efficiency” (DOGE), investors are betting that continued commentary from the richest man in the world around Dogecoin specifically could propel this token even higher from here.
However, Sunday’s selling pressure does appear to provide some pause for investors looking to place bets on this meme token potentially making a run toward all-time highs. On Sunday, the crypto market dipped amid sector-wide profit-taking as a new week rolled in. And as I’ll get into below, some rather bearish liquidations data started flowing through, suggesting forced selling could be leading to at least some of today’s rebound for Dogecoin.
Where is Dogecoin headed from here?
This weekend’s price action could indicate what investors are likely to see moving forward. In my view, the Saturday pop that brought about three-year highs for Dogecoin is emblematic of the incredible upside momentum Donald Trump and Elon Musk have provided for projects like Dogecoin.
However, Sunday’s decline does suggest leveraged bets to the upside on Dogecoin are getting unwound to a much greater extent, and this is proven with the most recent 24-hour data on crypto liquidations. Approximately $21 million of long derivatives bets on Dogecoin have been liquidated over the past day, relative to roughly $7 million in bearish bets liquidated over the same time frame. In other words, forced selling is at least partly responsible for the quick drop Dogecoin investors have seen from fresh multi-year highs.
I think Dogecoin will remain a top token to watch in the coming days, and I expect to see continued volatility with this project take hold in the coming weeks. This remains a top crypto project only those with the stomach for this kind of intense volatility may want to look at. But it’s also a project that’s certainly entertaining to watch from the sidelines, and as Elon Musk has attested in the past, invest a little funny money into to see where it goes.
Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
