After Dogecoin (DOGE) gained the limelight on January 28th due to a 980% pump, it briefly entered the top 10 ranking by market capitalization for the first time since 2015. As the massive pump lost momentum and traders quickly took profits, it seemed like investors would get past the meme-based cryptocurrency and find something else to invest in.
The pump initially kicked off when the stock exchanges prevented retailers from buying more GameStop and AMC stocks on Jan. 28. Driven by the Reddit discussion group r / Wallstreetbets, the investor army turned its attention to silver and a selection of “cheap” cryptocurrencies.
On January 28th, Twitter user “WSB Chairman” asked, “Was Doge ever at a dollar?” to its 750,000 followers. That was enough to trigger the monster rally, even though Dogecoin hasn’t had any protocol upgrades or developments since 2015.
DOGE / USDT 1 hour chart. Source: TradingView
The 68% retracement that followed the high of $ 0.087 was similar to the sharp decline in Bitcoin (BTC) after the December 2017 crash, except that this time it was just 24 hours instead of 50 days.
Several social media influencers and streamers voiced their dissatisfaction with buying the top, an indication that the current speculative frenzy was over. After spending most of January 30th and 31st on $ 0.03, DOGE managed to produce another 80% pump in less than three hours.
Finding the exact trigger for these events is nearly impossible as there are multiple social networks including private Telegram groups and trading signal apps.
Reddits r / SatoshiStreetBets currently has 213,000 active users. After the outbreak of DOGE, a meme post by user Woke_AF_Populist quickly rose to the top-rated list.
Wall Street Bets’s crypto sub-Reddit. Source: Reddit
There seems to be endless support from the Dogecoin fan base, including Tesla’s CEO and founder Elon Musk. The lack of a specific use case for the meme coin surely begs the question of whether members of r / WallStreetBets will jump out of traditional markets and embrace the generally unregulated ethos of the cryptocurrency sector.
Dogecoin price vs 30 day average tweet volume. Source: TheTie
Whatever the outcome, measuring social activity will from now on become the norm rather than an alternative indicator.
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