After gaining the spotlight due to a 980% pump on Jan. 28, Dogecoin (DOGE) briefly entered the top 10 ranking by market capitalization for the first time since 2015. Once the massive pump lost momentum and traders quickly took profits, it seemed that investors would move on past the meme-based cryptocurrency and find something else to invest in.
The pump initially started when exchanges prevented retail traders from buying more GameStop and AMC stock on Jan. 28. Fueled by the Reddit discussion group r/Wallstreetbets, the army of investors turned their attention to silver and a selection of ‘cheap’ cryptocurrenceis.
On Jan.28, Twitter user “WSB Chairman” asked, “Has Doge ever been to a dollar?” to his 750,000 followers. That was enough to trigger the monster rally, despite Dogecoin having no protocol upgrades or developments since 2015.
The 68% retracement that followed the peak at $0.087 resembled Bitcoin’s (BTC) sharp drop after the December 2017 crash, except this time around, instead of 50 days, it took only 24 hours.
Multiple social media influencers and streamers expressed their discontent at buying the top, an indication that the momentary speculative frenzy had passed. After spending most of Jan. 30 and Jan. 31 hovering around $0.03, DOGE managed to produce another 80% pump in less than three hours.
It’s almost impossible to find the exact trigger for those events, as there are multiple social networks, including private Telegram groups and trading signal apps.
Reddit’s r/SatoshiStreetBets currently has 213,000 active users and following DOGE’s breakout a meme-post by user Woke_AF_Populist quickly climbed to its most upvoted list.
There seems to be endless support from the Dogecoin fanbase, including Tesla’s CEO and founder Elon Musk. The lack of a concrete use case for the meme-coin certainly raises the question of whether members of r/WallStreetBets will jump ship from traditional markets and embrace the generally unregulated ethos of the cryptocurrency sector.
Regardless of the outcome, from now on, measuring social activity will become a norm instead of an alternative indicator.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Ray Schuetz received a Masters Degree in computer science from The University of Texas (Austin). Ray has been working as a full-time blockchain consultant for the past 3 years. In his spare time, Ray enjoys writing for EthereumCryptocurrency.com and other crypto news publications.