After gaining prominence due to a 980% bomb on January 28, Dogecoin (DOGE) briefly entered the top 10 of the market capitalization ranking for the first time since 2015. Since the big bomb has lost momentum and traders have quickly realized profits, it looked like investors would go beyond meme-based cryptocurrency and find something else to invest.
The bomb started initially when the exchanges prevented retail traders from buying more GameStop and AMC shares on January 28. Powered by the Reddit r / Wallstreetbets discussion group, the investor army turned its attention to silver and a selection of ‘cheap’ cryptocurrents.
On January 28, the Twitter user “WSB Chairman” asked, “Has Doge ever won a dollar?” for its 750,000 followers. That was enough to trigger the monster rally, despite Dogecoin having had no protocol updates or developments since 2015.
The 68% retracement that followed the $ 0.087 peak resembled the sharp drop in Bitcoin (BTC) after the December 2017 crash, except this time, instead of 50 days, it only took 24 hours.
Several influencers and social media streamers expressed their dissatisfaction with buying the top, an indication that the momentary speculative frenzy had passed. After spending most of January 30 and 31 hovering around $ 0.03, DOGE was able to produce another 80% bomb in less than three hours.
It is almost impossible to find the exact trigger for these events, as there are several social networks, including private Telegram groups and trading signals apps.
Reddit’s r / SatoshiStreetBets currently has 213,000 active users, and after the DOGE crash, a meme post from user Woke_AF_Populist quickly rose to its top-rated list.
There seems to be endless support from Dogecoin’s fan base, including Tesla CEO and founder Elon Musk. The lack of a concrete use case for the meme currency certainly raises the question of whether members of r / WallStreetBets will abandon traditional markets and embrace the generally unregulated ethos of the cryptocurrency industry.
Regardless of the outcome, from now on, measuring social activity will become a norm rather than an alternative indicator.
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