Dogecoin (DOGE) Price Surge Not What You Might Think: Crypto Market Review, October 5

The cryptocurrency market rally we saw yesterday may be in its final stages, given the state of most digital assets we see today. Even a strong price performance on assets like DOGE does not seem to rest on a solid foundation.

DOGE’s rally is purely speculative

Despite the strong 7% price increase we saw yesterday, Dogecoin shows no signs of a noticeable breakthrough and is already losing more than half of its value in today’s trading session.

The problem with the current price increase is the main reason for this, namely the potential completion of the purchase of Twitter by Elon Musk. Previously, some crypto enthusiasts suggested that Musk would bring DOGE or another cryptocurrency to the social media platform.

Ads

However, according to court documents, Musk doesn’t think implementing digital assets on the platform is a good idea given all the congestion and security issues digital asset users face in outside of mainstream platforms.

The lack of fundamental support and questionable growth fuel creates immediate profit, taking the same coin, which is why we are seeing a return below the exponential moving average.

From a technical standpoint, Dogecoin will continue to move within the extended consolidation channel formed in June. In the long term, DOGE has been in a strong downtrend since 2021 and unfortunately shows no signs of reversal since April this year.

Bitcoin rejected at resistance

Bitcoin’s run towards the 50-day moving average can be seen as another attempt to break the downtrend formed since November last year. Unfortunately, the bulls were unable to push the first cryptocurrency above the important price level.

The spike in selling pressure has taken the asset back to the $20,000 threshold and will most likely lead back to the high support level at around $19,200. Trading volume profiles suggest that digital gold is not attractive to investors, as the risks around the cryptocurrency market are still unreasonably high to invest in institutional-grade funds.

Ethereum repeats after BTC

Despite the decoupling we saw in the run-up to the merger, Ethereum’s dominance dropped massively, given its deteriorating price performance and Bitcoin’s increasing market dominance.

Over the past 24 hours, Ethereum has lost around 1.3% of its value after failing to break through the local resistance level reflected in the 50-day moving average. Unfortunately, Ether remains in the 53-day downtrend that started after the successful installation of the Merge Update.

Unfortunately, Ethereum is not showing anything exceptional and will most likely continue to decline until the market recovers overall.