After Elon Musk replaced the Twitter logo with the Dogecoin (DOGE) mascot, the world's largest meme token once again exceeded the $0.10 level.
Although the DOGE price dropped to the level of $ 0.93 at the time of this writing, it is still high compared to its pre-rally level. So, is the foundation of this rally in DOGE price solid and how can there be a way ahead of DOGE? Analysts evaluated the situation.
Analyst Says There Is Little Support To The Downside In Dogecoin Price
“Dogecoin liquidity has dropped by about 10% in the last two weeks and briefly dropped -60% as its price surged on Monday,” Kaiko research analyst Conor Ryder said. “In a meme token like DOGE, most of the big moves come from trends, and the lack of liquidity is having a leverage effect on the size of those moves,” Ryder added.
Ryder noted that his depth in the cryptocurrency market is at 10-month lows, meaning it's getting easier and easier to move prices with a smaller size order.
Ryder said that the movements in Dogecoin are no different, adding that "DOGE benefits from its illiquidity, but there is equally little support on the downside, so investors can expect more volatility in the "short term".
Matt Kunke, a research analyst at MGSR's market maker GSR, shared a similar sentiment, saying that the dynamics driven by "Musk's erratic behavior" are "historically short-lived".
*Not investment advice.